Summary
What a month. Two major macro events, a new president and breakthrough vaccines coming sooner than many expected.
The vaccine news caught me somewhat off guard. But it’s forced me to reevaluate my convictions in a post covid world and adjust my portfolio accordingly. I think it was Bear who reminded me in a previous post the importance of revisiting your conviction regularly, so I am attempting to follow the strategy each month. You will notice below a slight adjustment to my strategy. I am eager to invest more in sub 10 billion market caps, so have been researching in that space a lot and subsequently have found a few companies I’m bullish on.
Background
I’m often intrigued about the background of the champion board members here when I read their monthly updates so I thought I’d share a little information about me.
I’m a 37 year old Brit, I have 3 kids under the age of 6, live in London, and run my own angel investment co & incubator, focusing on Saas, fintech, marketplaces and D2C. I founded designmynight.com and exited a few years ago.
I began picking stocks about 10 years ago, started out penny stock investing on the AIM market in the UK but thankfully discovered the Motley Fool, fell in love with the Gardner brothers and found my way to Sauls board, which I am forever grateful for.
Over the past two years, I’ve evolved from picking long term hold, founder led growth companies to a hybrid of that and Sauls methodology.
I use a combination of the Motley Fool, Sauls Board, CML Pro, Beth Technology, and Berts Ticker Target services as my research tools to ultimately land on my companies.
Performance to date
YTD - I am up 144% as of November 30th 2020
January 2020 - 16%
February 2020 - 12.40%
March 2020 - 20%
April 2020 - 9%
May 2020 - 22%
June 2020 - 29%
July 2020 - 60%
August 2020- 68%
September 2020 - 105%
October 2020 - 101%
November 2020 - 144%
My portfolio
Crowdstrike - 16.85%
Zoom - 16.44%
Peloton - 13.70%
Rok - 11.37%
Teladoc - 10.96%
Etsy - 8.36%
Docusign - 5.89%
Pinterest - 5.62%
Magnite - 5.43%
FuboTV - 5.37%
November 2020 Activity
A really busy month for me. But as mentioned above, it was always going to be that way after the vaccine news, as it prompted me to look ahead and build the portfolio out for 2021 and beyond.
SOLD
Digital Turbine - This position was always a bit of an outlier for me. I had a great run on it, but ultimately when I was ranking my ideas, it didn’t make the long term cut so I sold out.
Peloton - I’ve trimmed my Peloton position significantly. This has been a big learning curve for me. After their earnings call I felt very bullish and increased my position significantly as my top holding. But thanks to an excellent discussion prompted by Bear, I think I realised I was getting ahead of myself with my conviction. This was accentuated when the vaccine news hit, we all knew this was going to come, but I don’t think I had mentally prepared for it, and my position size should have reflected the fact Peloton is likely to have more headwinds in 2021 than 2020. I still believe in them as disruptors and believe the stock will deliver great returns in the future but in the next 12 months, I’m less bullish that the market will believe in their future growth, so I’ve adjusted my position accordingly.
I’ve also trimmed Etsy and Teladoc, purely to raise funds for other positions.
BOUGHT
Roku - They’ve been on my watch list for a while now. As I said previously, CTV is undoubtedly early innings, a huge secular trend, and Roku are first in line, their Q3 earnings was very positive on many levels, so I went in with a fairly big opening position and it has since shot up. I fully expect Roku to be a strong performer in 2021.
Pinterest - So I finally bought after being on my watch list for a while. Founder led, a triumvirate of social media, e-commerce and video, a ridiculous amount of users not yet monetised, I think we’ll see a breakout year for Pinterest in 2021.
Magnite - I’ve previously held as Telaria so knew their potential, and I have been waiting to see how the merger goes. Their latest earnings, Disney+ partnership and subsequent industry presentations has shown these guys are now serious on CTV (albeit VERY early days with their revenue). With their current market cap and potential, I’m pretty excited to see how 2021 plays out for them. I will look to add after seeing more meat on the bone from their next earnings. Beth Kindig produced an extremely positive report on them and thank you to some cracking posts from Mekong & Rockleppard that gave me further confidence.
FuboTV -
A name that I haven’t seen mentioned on these boards. Again, Beth Kindig brought them to my attention. They are the Netflix of Sport. They just had a breakout quarter and guided for 70% growth in 2021, which shows a lot of confidence from management.
“We believe fuboTV sits firmly at the intersection of three industry megatrends: the secular decline of traditional TV viewership, the shift of TV ad dollars to connected TVs and online sports wagering”
Online sports betting could be huge for them. They sit in my sub 10b market cap basket, again will look to add if the numbers keep going up. Feel free to message me if you’d like to know more.
My companies
Crowdstrike -Eagerly awaiting the earnings report on Wednesday.
Zoom - Another great quarter. I still need to fully digest the earnings call. But I think a picture is starting to emerge where they will be doing 5b in revenue next FY, likely to hit 40-50% growth on the Covid comps. So the decision is how much is the market willing to pay up for this next year? One to think about this month.
Peloton - as discussed above. My Peloton arrives next week, excited to try it out!
Roku - as discussed above.
Teladoc - I said last month “It looks like we’ll need a few more quarters for the market to believe again.” That’s still the case… I’m willing to wait on them considering the potential for digital healthcare to transform this space.
Etsy - Happy holding Etsy. I’m confident that the Christmas season is going to blow past estimates. Management needs to paint a picture for how 2021 will keep up the growth but I still see Etsy being a 100b e-commerce company in 2-3 years.
Docusign - Eagerly awaiting the earnings report on Thursday.
Pinterest discussed above.
Magnite discussed above.
FuboTV discussed above.
Watch List
Cloudflare - A company I’ve been admiring from afar but not yet taken the plunge. I’ll be researching them more this month to see if they make the cut.
Sea Limited - A great earnings report, watching closely as everything impresses me about them.
Fiverr Firmly on my radar now thanks to Tom Gardner. I’m starting to see signs across the Motley Fool universe that he is super bullish, similar to how he was with Shopify before their big breakout. I firmly believe in the huge disruption taking place in the workplace. The digital freelance model is here to stay and I love their strategy of moving upstream into enterprises. Small market cap and guiding for strong growth in 2021. I’m tempted to open up a position.
AMD/Nvidia Beth Kindig has got my attention on the Semiconductor space. Although I’m not allowed to share the details, all I’ll say is she thinks the market opportunity of AI is 4x what mobile did for the FAANG group. Chips & AI are going to take over the world… these two companies seem like they are best positioned to lean into this market opportunity. Would love to hear from anyone here invested or has views on either?
Square - A company and founder I really admire. But can’t seem to take the plunge on them. Hmmm.
Thank you to everyone that contributes to this board and stay safe.
Andrew