Jason’s Jan Port Summary

It’s been a great month for many here to add Port summaries. I’ll try not to duplicate what others have said.

Following last years 203% increase in market valuations to my portfolio, this month was quite calm, relatively.

The following consists of Rollover IRAs and Roth’s and makes up more than 90% of what will fund my retirement. I’m 53 y/o. My wife and hope to retire when my son finishes high school in four years, thanks Saul and many other here for that possibility.

January +3.6%

The above mentioned portion of my Portfolio (more than 90% of what we’ll have to fund our retirement)
NET 23.28%
CRWD 23.24%
DDOG 14.77
Sea 12%
SNOW 9.08
No cash

This month, due to changes in relative scores I give each company which I’ll explain a little later, I’ve sold more Zoom (29) and Asana (24)to add to SNOW(38) and Docu (32)after reviewing the following criteria.

I wrote the following criteria for valuing companies in March of 2019, after following this board for more than a year at that point. It really hasn’t changed.

  1. being Founder Lead (not just their habits of transparency, execution (eg. Agile’s velocity) but also his/her ability to communicate during CC’s. Reasonableness of c suite stated vision of how to execute and for potential of optionality/growth adjacent
    2)SAM/TAM, not only from the CC’s given by the Co. but when researched in trade magazines; market penetration %. Is it growing, growth adjacent.
    3)Dollar Based Retention rate (revenue and bookings); now more often expressed as Annualized Recurring Revenue
    4)CAP measured by: growing market share, Gardner Leader/magic quadrant, Net Promoter score, adoption rates by developers (tags in software engineering forums), number of competitors and how well healed/ motivated / how well staffed with expertise etc.; developer fan base (fanaticism of product users within customer organization); self on-boarding.
    5)level of product integration into customers infrastructure/processes
    6)level of disruption to current market paradigm/first mover advantage
    7)asset light/software defined/cloudified/AI benefited - in current paradigm shift in way of doing business and where in the S-curve of technological adoption for the particular sector being applied.
    8)Then there’s the numbers are they predictably accelerating toward more growth/FCF/Profits what are their margins and how well will they be able to sustain margins.

On each of the above I give score on a five point scale.
Zoom (for example)

  1. I give Eric Yuan a 5
  2. DCCD said better than me-
    My argument is OnZoom will be the Amazon for services. I predict that in 4-5 years, I will get my accountant for tax return OnZoom, get gym lessons OnZoom, consult a lawyer OnZoom, get my daughter’s math tutor OnZoom, and ask a plumber for a quick check of my water heater OnZoom, phone is not necessarily physical, Communications as a Service 5
  3. 130% among the best of the best 5

  4. This area holds a lot of different parts. On average I give it a 4
  5. Zoom can be swapped out relatively easily, despite the Weak Network Effects, 2
  6. despite having a lot in the works (eg: OnZoom)this is yet to be seen. However I do give the Virality of End users demanding enterprises to adopt Zoom over Teams as powereful, albeit anecdotally. Still this waits to be seen 2
  7. The adoption curve has been so compressed by COVID. I believe Zoom is presently in the trough of disillusionment. How soon it’ll enter the slope of Enlightenment is likely early this year, IMHO. 5
  8. Although YoY is ridiculously amazing and GPM FCF etc are equally impressive, the drop in sequential revenue growth from +169% to +17% is why share price dropped 40%, IMHO.1

Despite my Bachelors Degree in Psychology and having read Thinking Fast and Thinking Slow several times, I do get pulled into Price Anchoring, thinking linearly vs exponentially, and other seemingly built into our brains biases. But I really try not to let those effect my decisions. Thanks mostly to Saul for keeping me focused on the above criteria.

It’s often more complicated than that (I do enjoy reading and trying to understand the tech); but, it’s rarely less complicated before I make a trade. I choose to no longer add to my portfolio so I force myself to sell something to buy something else.

Thanks again to everyone for the sharing of their wisdom and continued support,

Lots of Love,