Well I’m going to give my April summary a few days early for two reasons, first because it’s easier to do on the weekend than on a weekday when April actually ends, and since we are in earnings season, to avoid any confusion as to what stocks I’m in, as when someone asked yesterday if I was still in UBNT.
Here’s the summary of my positions as of April 25th.
So far, I’m up 20.0% on the year. The S&P 500 is up 2.9%, so I’m ahead of the S&P by 17.1% after almost four months. Here are my current positions:
My big four from last month are still my biggest positions. I had trimmed SWKS in March when it went over 15%, then again when it went over 16%, and bought some back in a big decline, and had to sell again when it bounced all the way back because my new purchases would have made me over 17%. This month I trimmed a little more to keep it from going too much above 16%, and in the last few days it fell below 15%. This is all totally just adjusting around the edges of my position, dropping the position size from 16.4% down to 15.8%, etc, trying to keep an oversize position from getting completely out of hand. It’s not a significant change in the position. Here they are with their percentage of my portfolio, trailing PE, and percent growth of ttm earnings.
SWKS at 14.7% - trailing PE is 24 - ttm earnings growth is 64%
SKX at 14.4% - trailing PE is 25 - ttm earnings growth is 132%
BOFI at 13.8 % - trailing PE is 20 - ttm earnings growth is 39%
CELG at 10.9% - trailing PE is 32 - ttm earnings growth is 18.5%
SKX has continued to move up in the positions, and passed BOFI in the past few days with its 20% rise after earnings, helped also when I added to my position just before earnings when I saw how low the 1YPEG was. CELG is at a PE over 30, and at a high 1YPEG, so I trimmed it several times in March to keep it from getting too big a position. I didn’t trim any this month.
Note the following:
My big four now make up about 54% of my total portfolio. This is up a little from 53% a month ago and 50% two months ago, in spite of my trimming. They are high conviction though, and this percent doesn’t bother me.
They are in four entirely different fields: microchips, banking, retail clothing, biopharmaceutical. This wasn’t by design, but it sure spreads the risk.
Their average trailing PE is 25.5, which is fine with me.
Their average rate of growth of ttm EPS is about 63.4%, which is even better.
Next we have CRTO which is aspiring to turn it into the big five, largely because I’ve been adding to my position on seeing how tiny its 1YPEG is.
CRTO at 8.2% - trailing PE is 47 - ttm earnings growth is 325% (yes, you read that right!)
Now we drop down again to my middle-size positions, ranging in size from 6.3% to 4.3%, in this order.
XPO and WAB haven’t changed position. I’ve sold AIOCF. It’s hard to say why. I needed cash, and AIOCF was complicated in a lot of ways by being in Canadian dollars, and I sold it. AMBA was in this group last month but I’ve trimmed it because of extreme reliance on two customers for 88% of its revenue, and loads of insider selling. Right now their business is doing gangbusters though, and it’s still a small position. EPAM and SNCR moved up from small positions to middle size ones.
My small positions, running from 2.9% to 2.2%, are
UBNT is gone for all the reasons that have been discussed at length on the board. POL was added back. I have no tiny positions at present, although I experimented with MIDD during the month but decided I had better places for my money.
Since I began in 1989, my entire position has grown to 295.7 times what I started with. That’s not 295.7%. It’s 295.7 times! Basically a 296-bagger on the entire position, not on any one stock, but on the entire position. That’s the power of compounding an average 30% growth annually, and that’s what investing is all about. Not holding on to individual stocks forever so you can eventually say you have a 10-bagger or a 20-bagger in an individual stock while large numbers of your companies have gone to hell and you are still holding on to them. Or hanging on to what once was a great stock even after it has flattened out, so you can still brag that you have a 30-bagger in your portfolio! Right now, I don’t have more than a two-bagger on any of my current stocks, but who cares? It’s what my entire portfolio has done that counts.
You may wonder “How is that possible? Even Buffet doesn’t make 30% compounded.” But Buffet was managing tens and hundreds of billions of dollars. It’s like maneuvering a battleship instead of a speed boat. Or one of those super oil tankers that is three football fields long. Buffet had to buy whole companies, for gosh sake. And he never invested in any technology companies. And mutual fund managers who do well one year have money pour in, and the next year they have to manage ten times as much money, which is a whole new ballgame. And they also have all kinds of restrictions on what they can and can’t buy. I had a lot of advantages.
If you are new to the board and want to find out how I did it, and how you can do it yourself, I’d suggest you read posts #4 through #8 at the beginning of the board, and especially the FAQ/Knowledgebase that Neil keeps for us, currently post #7062, which is a compilation of words of wisdom. There are just a few things I might change now. I said that 25 to 28 stocks were the most you should try to keep track of, but I have cut that down now for myself to 15 to 20. I currently have 15. That means that my biggest positions are bigger (and my smaller ones too) and it lets me concentrate more in my highest conviction stocks. I also have made a major effort to eliminate or reduce my positions in illiquid stocks. For example, I’ve kept INBK a small position because it is illiquid.
Hope this has been helpful.