Work has been insanely busy, and life has taken some unexpected turns since my February update, resulting in significant changes to my portfolio.
Here’s what my portfolio looked like at the end of February, 2024:
Nu Holdings (NU) 15.62%
Palo Alto Networks (PANW) 15.45%
PureStorage (PSTG) 13.97%
Samsara (IOT) 13.46%
CrowdStrike (CRWD) 13.44%
The Trade Desk (TTD) 9.21%
Remitly (RELY) 6.84%
Beam Global (BEEM) 6.38%
Aehr Test Systems (AEHR) 4.05%
C3.ai (AI) (a position I hold for my brother) 1.53%
CASH: 0.05%
I think I reported that I sold out of $PANW and $AEHR after earnings. I had expected improved conditions in both and didn’t get them.
During March I also added Oddity Tech ($ODD). I wrote about that here.
PORTFOLIO PURPOSE
This portfolio was originally funded with the proceeds from the sale of my home, when I changed jobs in August of 2020. I’m about five years out from retirement and hoped to grow the money to reinvest in wherever I would live when the time came.
In an unexpected twist, I found the perfect home on April 30, when I wasn’t even looking. This real estate market is no joke, and there were multiple offers above the listing price before the first day of showings on May 1.
My retirement is still five years off, but I couldn’t win a bidding war with any contingencies attached to my offer, so I had to pay cash. That meant liquidating almost all of my portfolio to win the bid. (Which I had won by noon on May 3, after a fierce bidding war, with dueling escalation clauses. My cap was a mere $9k above the other person!) I closed on Memorial Day weekend.
THE DILEMMA
My question was what to sell and what to keep, and it was an interesting exercise.
Although I had some speculative positions ($BEEM, $RELY, $ODD), I still believed in them, but they were underwater. I had well-established companies that were high confidence and growing that were up well over 50% for me ($CRWD, $TTD), but for how much longer? And I had companies that were high confidence, all up quite a bit since I bought, and closer to the beginning of their S-curves ($PSTG, $IOT, $NU). Here are the options as I saw them:
- Keep all positions but severely trim them all.
- Sell out of the speculative ones and trim all the rest.
- Sell out of the speculative ones and also out of the larger anchors, the early S-curve group, or some combination, and keep the others intact.
Complicating the decision was needing to sell before some in each group had reported Q1.
WHAT I DID
The total portfolio wasn’t that large to begin with, so I pretty quickly ruled out option 1. Psychologically, only being able to have a few shares in a company doesn’t feel like even great gains will make a difference. That may be wrong-headed, but thinking about it depressed me.
Both options 2 and 3 required selling out of the speculative stocks (which were smaller in size than the others) so $BEEM and $RELY were the first to go. $ODD had what I thought was a great quarter, but as I was debating that one, a nasty short report targeted them, and I decided to just get out there, too.
Next, I decided that, whatever else happened, I wasn’t selling a single share of $NU unless absolutely necessary. It’s my highest confidence position (even before the sale of the others), I’m in at a good price, and I think it has a very long way to run.
As you’ve probably noticed, I have tended to swing for the fences with this portfolio. I decided that my real estate investment would likely gain more across time than my anchors, and my anchors offered more profits, so I only needed to sell two companies and could keep three. So, I sold out of $CRWD and $TTD.
After selling out of my top gainers and losers, my portfolio (if you can still call it that) looks like this as of this morning’s open:
Nu Holdings ($NU) 33.09% (Up 48.78% since my purchase)
Pure Storage ($PSTG) 28.25% (Up 70.81% since my purchase)
Samsara ($IOT) 22.77% (Up 34.59% since my purchase)
Cash: 13.35%
I couldn’t sell $AI, since I hold that for my brother. It is now 2.55%.
It’s more than likely that the cash position will move permanently out of the portfolio and the other positions may disappear over time, too, depending on what I decide to do at the new property.
GOING FORWARD
I have no idea how to evaluate my portfolio performance with all the things sold and money permanently moved out. But, as a general matter, it has served its initial purpose in getting me into a home for retirement, with no mortgage, even though I’m not yet retired.
With just three companies left, I will likely post a lot less, since I’m following far fewer companies and new money will likely be going into my more tangible investment.
If I sell anything else, I’ll post about it. Otherwise, I will follow your insights with great interest and will remain grateful to Saul and all of you for all I have learned here. I leave you with the view from my new deck.
Pro-Tip: Randomly Google your dreams, sometimes they show up at the top of the search results!
JabbokRiver