FinallyFoolin Portfolio January 2021

A bit about FinallyFoolin.

I’ve posted a little on the board but mostly lurk. I’ve actually been doing monthly writeups for 6 months now but haven’t posted any of them until now. I’m in IT (Database Administrator) by trade, working for a local consulting company.

In 2014 I got tired of the returns Morgan Stanley was getting for me and I took everything away from them and started my investing journey. I started with Motley Fool’s Rule Breakers as a guide and read financial news on fool.com daily. As I started out, I quickly found I did not have the stomach for volatility. After finding Saul’s board, I realized that this interpretation was wrong. I lacked the conviction in my companies, not the stomach for volatility.

Anyway, my first couple years on my own were pretty rough. I kept the allocation from Morgan Stanley in a portfolio watch list for comparison and that helped a ton because, well, it was really bad. I almost gave up and just put everything in an S&P 500 index fund or ETF. Then, things started to click. From there on, I was beating the S&P with regularity by about 10% or so. I was happy with this but came to the realization that my 40 position portfolio was a lot to manage AND that my smaller companies were doing better than my larger ones. At this time, my biggest positions were Amazon, Netflix, Microsoft, Apple… Among the smaller ones were Twilio, Shopify and Okta. I began to look for better ways to uncover these and my goal was to have my entire portfolio be made up of smaller companies.

This is when I got LUCKY and discovered Saul’s board. I actually found it from a post that a guy had put on the Motley Fool Facebook Rule Breakers page (before they shut that down). A couple posters there referencing Saul and Saul stocks. So… to Google I went and BOOM, found this place. While the outside looks broken and run-down (with the very dated board software), the inside is pure gold. In fact, WAY more valuable than gold. This was May 2019. I IMMEDIATELY switched over and became a disciple of this investing strategy.

Ok, enough about me.

After an incredible 2020 where my portfolio was up 215% (Thank you Saul & Saul’s board), my goal for this year is 30% and hope is 50%.

Performance
YTD: 10.7%
S&P: -1.1%

Monthly Performance
MTD: 10.7%
S&P: -1.1%

Monthly performance, January allocation and Decembert allocation below

Monthly January December
CRWD 2% 19% 21%
ROKU 15% 19% 18%
TDOC 32% 12% 10%
SE 9% 10% 9%
MGNI 13% 8% NEW
DDOG 4% 8% 8%
ZM 10% 7% 7%
NET 1% 7% 7%
FUBO 51% 6% NEW
OKTA 2% 3% 3%
DOCU SOLD 7%
ETSY SOLD 9%

One BIG change to my investing this month is that I cancelled my RB and TickerTarget subscriptions and replaced them with Beth Kindig’s. I hadn’t used RB in over a year and have been disappointed in TT mostly because there is only a small focus on the types of companies I’m interested in. He tends to write a lot about companies growing slower than 40%. I ABSOLUTELY love Beth’s. It compliments my investing style very nicely. She and Knox have 20 long term holds but when I started, 6 of my 10 companies are on her list and 2 others are just on the outside!! Knox is more of a technicals guy but Beth is the reason for it as her product analysis and knowledge is magnificent.

Transactions:
Beginning of the month, sold ETSY & bought MGNI. Also increased SE and NET.

  1. MGNI in hyper growth mode
  2. MGNI in CTV advertising, like Roku
  3. MGNI the partner with Disney +
  4. If cookies are a thing of the past, MGNI will accelerate BIGLY
  5. ETSY lowest conviction
    a. Love the company and what they’re doing. COVID gave them an acceleration but it seems they’re back to growing at the same rates. They might have a BLOWOUT for Q4.

Last day of the month, sold DOCU and bought FUBO. The reasons for this:

  1. FUBO is in hypergrowth with CTV (38% QoQ last report)
  2. FUBO has a HUUUUGE opportunity in front of it with adding gambling this spring
  3. DOCU my lowest conviction at the time
    a. Larger company growing at 40%. Love the company and its future and dominance but I want higher growth

Should have done the FUBO one earlier in the month too.

Individual Positions:
CRWD
Solid 80% grower chugging along. Valuation is high but it should be for a company growing at this rate with their gross margins AND the unquestioned leader in their HUGELY growing industry. When companies (or the government) is hacked. CRWD is brought in to prevent it from happening in the future.

ROKU
CTV is here to stay. What has not yet happened though is the advertising dollars haven’t followed the eyeballs. Its still the early innings here. Leading platform for CTV. All streaming apps must be on Roku. Been in this company for a long long time. Almost sold out in June, not due to my conviction going down but due to seeing so many others give up since it had gone sideways for so long. I probably said to my wife 3 times a week, “I don’t know why its not going up, it really should an will at some point”. Said this for months. Finally was rewarded for the wait when it shot up over 3x since June. Again, still early innings with a huuuuge runway.

TDOC
I was invested in LVGO and very excited about it. I knew they were a target to get bought and was afraid of them being bought by CVS or another very large company where they would have very little impact on the bottom line. My initial reaction to TDOC was that I was very happy with it. A bit disappointed in what the acquisition price was but also VERY happy that they will impact the overall growth of TDOC. In fact, its completely possible for LVGO revenue to eclipse the previous TDOC side in 2021! If LVGO keeps its triple digit revenue growth, this equals acceleration. Needless to say, I’m much more invested in TDOC for the LVGO side. Hence why I’m in TDOC and not AMWL.

SE
This is an exciting story for me as well. SE is a Huge gaming company and their market is very large. However, I’m invested in their e-commerce side. They are using their gaming revenues to build up their ECommerce. ECommerce is growing at very high rates (triple digits). This is another like Roku & TDOC where when the revenue of this new line of business eclipses the traditional side, then they will be greatly ACCELERATING.

MGNI
I was invested in this back when it was TLRA. I sold out of it before their merger and only recently got back in. This is a pure CTV advertising investment, similar to ROKU. Their biggest customer is Disney +. If they lose Disney, that’s a huge risk, so keeping a close eye on that. So far, it seems Disney is all in with them. In addition to CTV ad dollars, they could also be the beneficiary of targeted advertisement dollars if Apple and Goole do away with cookies in their browsers. Already in hypergrowth mode in a growing area and additional areas of revenue acceleration.

DDOG
Great SaaS company with great revenue and margins. While the next Q or 2 might not show revenue acceleration, watch the QoQ to see the real story. Expecting them to get back to pre-covid growth levels like they stated in their CC. Passing Dynatrace in terms of revenue, possibly in this Q. I don’t know if the product is better than Dynatrace, but their sales methods are head and shoulders better which is why, IMO, they are growing so much faster. Dynatrace sells their full package to customers. DDOG sells a module or two then expands. Easier to convince a company to give a try or let them buy just where their painpoints currently are and let them add on later.

ZM
Love the growth over the past year. I know a lot of people sold out when the QoQ growth slowed so much (just like they sold out when LVGO was purchased). However, even their “slower” growth rate is among the fastest. The QoQ they reported last Q equates out to about where they were pre-Covid (80% ish). The exciting part here is their Zoom Phone. Its such a natural next step and really costs them very little in terms of network and resources there. Seeing they have already signed up a million licenses for it is exciting. How much impact will this have on their overall growth? I don’t know which is why they are lower.

NET
I was on the FSLY from after Covid until their sales methodology caught up with them. Switched those funds to NET. Very excited about the continuous announcements and improvements. Yes, started as an edge network of sorts but they are soooooo much more. I think the most exciting part for me is the security focus. Secondary would be their speed. Switched over my home network and smart phones to use them (its FREE). Thank you hhhypergrowth for that piece of information!!

FUBO
Smaller company, smaller revenue, small relative valuation. Currently growing at hyper growth levels and this is just with CTV. However, I’m invested in it for the gambling potential. Announced pushing up the gambling stuff to Spring. Consensus estimates are revenue growth almost 10x in 5 years.
Goal in February is to build up to 10% position

OKTA
Really like this company but its growing at a much slower rate. The only reason I’m still in this is that it is in a taxable account. This is first on the list to sell in that account and I’m expecting to do that at some point in 2021. Its definitely in the long-term capital gains rate. Its up 6x since first purchasing in this account!

Watch list:
SNOW, DOCU, ATOM, U, PTON

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As I started out, I quickly found I did not have the stomach for volatility. After finding Saul’s board, I realized that this interpretation was wrong. I lacked the conviction in my companies, not the stomach for volatility.

I just thought this was a fantastic couple of sentences. Very well put and congrats on the nice returns this month. Well put and well done!

A.J.

33 Likes