Summary
Brutal. I think that sums up 2022 pretty well so far.
Congratulations to everyone hanging in there. It’s been mentally very taxing if you have held tech growth stocks these past 6 months. Maybe there is a little light at the end of the tunnel with the potential for the FED to reign their hikes in as the threat of a recession looms.
A quiet month for most of my companies and a few tweaks here and there for me.
My background
Entrepreneur, ex-founder of SaaS & marketplace business, exited, now founder of horseplay.ventures, angel investing & building other startups. Tweeting here:
https://twitter.com/andrewwebster11
Performance
2022 > -41%
2021 > 21%
2020 > 209%
2019 > 41%
April 2022> -41%
April 2022 Portfolio
DDOG - 17%
SNOW - 15%
UPST - 15%
CRYPTO -11%
NET - 11%
BILL - 11%
MDB - 11%
S - 6%
MNDY - 5%
SOLD
Zscaler This may turn out to be a temporary exit but I needed funds and I am concerned with their billing numbers. When I think about earnings and the likelihood of an acceleration vs a deceleration, the latter being something you don’t want to be on the wrong side of in this market, I decided the former is more likely, so I will sit earnings out and then decide whether I build this back up.
I also sold bits off from MNDY and S.
BUYS
MongoDB I used some of my cash to finally get my hands back on MDB. Peter Offringa’s world class research has raised my conviction levels and of course it’s reassuring to see a lot of the top board members get in too.
UPST I’ve increased my position. Call me crazy but in the mid 70’s seemed like a rather great price to snap up considering earnings are around the corner and there are some positive noises coming out. More on that below.
SNOW Again I’ve used the market sell off to pick up more SNOW. I think they are a powerhouse, with a lot of their bad news priced in, I think they’ll surprise to the upside on their 2022 revenue number, and the market will like it.
You can see I have also opened up some positions in the crypto space. Feel free to message if you’d like to know what these are.
My companies
Datadog All their positive news this month has been shared already. They remain my highest conviction BUT I must say that I am a little concerned with the guidance that might be forthcoming in the Q1 earnings. Q2 is the first quarter where they start lapping their tremendous fightback from the covid quarters. Q1 in 2021 went from 51% up to 67%, so its a fair bit higher than the previous 3 quarters where they are up against, 61%, 56% and now 51%. So they are going to bring in a killer Q1 2022 number but what will happen in the back end of 2022? As we saw with SNOW, the moment people realised they couldn’t sustain the 100%+ number, the market punished them. If DDOG says, hey our 80%+ days are over but don’t worry 60-70% we’re good for the foreseeable, it may take the market a while to appreciate this ala CRWD. I could be over worrying here but I am tempted to sit out earnings.
Snowflake I’ve increased my position as this company has so many things going for it. Market, management, moat, the 3m’s!
Upstart There have been a few snippets released recently which sounds bullish. For one, 8x the uptake of auto loans, https://twitter.com/StockMarketNerd/status/15193460158826496…
And the percent of loans being fully automated on the platform, has ticked up nicely for Q1 2022, yeah nice of management to release that for us before earnings! https://www.upstart.com/i/about
This is also an informative listen for those who want to get a bit more comfortable with the auto lending opportunity: https://info.upstart.com/ondemand-auto-webinar
Crypto As this board is for tech stocks, I won’t discuss further.
Cloudflare I’m looking forward to seeing if they can accelerate the revenue line into the 60’s. Feeling very comfortable with them in my portfolio now.
Bill.com A quiet month but it should get spicy when they report on Thursday. Considering how well everything was spinning in the last earnings and the large price drop since, I might look to increase my position before earnings.
MongoDB The acceleration of Atlas revenue is core to my thesis as well as seeing how widespread this product is in the tech world. My recent startup is using it and my tech guys love it. The cloud titans are partnering with them and should further cement their moat. When pitching them up against Zscaler, I felt like it was more likely for the revenue to accelerate from here vs Zscaler so hopefully the market likes what it sees over the next few quarters. I also really rate the CEO, Dev Ittycheria, serial CEO and powerhouse like Slootman. A nice little podcast to get to know him:
https://open.spotify.com/episode/6XDSkMqJcAtGpTJ5ohR3lx
SentinelOne A company I probably should have waited on. Because of the very low base, the jury is still firmly out on this one. The numbers are great but they are still tiny compared to CRWD. A candidate for the chop if better opportunities come along otherwise I will hold and see what earnings bring.
Monday.com Similar to S, I am questioning the durability and strength of their revenue numbers. It’s been tough to hold, despite having a lot of confidence in the market they operate in, but there is no doubt in this new market environment, they are not being treated as one of the indispensable, core SaaS opportunities so I may have to bow to the market on this one.
Watch List
CRWD - lots of great debate on the board, I can certainly see the justification for getting back in.
NVDA/AMD - continue to watch these guys closely.
Thanks to the contributors on the board as ever and stay strong, we’ll get through this!
Andrew