Jason’s July Porfolio Summary

Since the time I began to try to follow Saul’s advice and listen to the contributions from everyone here:

Year % Change
2018 +38.9%
2019 +32.9%
2020 +203%
2021 +46.8%
2022 (-)58.55%
2023 Month to Date Year to Date
January +14% +14%
February +6.45% +21.2%
March +1.55% +23.13%
April (-)14.5% +5.28%
May +31.5% +38.4%
June +7.3% +48.5%
July +4.4% +54.5%

Saul-
I tend to buy more as I see the price rise as a verification.

7/31/23 6/30/23 5/31/23 4/30/23 3/31/23 2/28/23
Tesla 35.02% 33.69% 33.11% 31.07% 30.32% 22.90%
Snowflake 20.01% 15.99% 16.03% 31.64% 28.18% 25.09%
Cloudflare 19.26% 19.80% 33.8% 28.65% 27.03% 22.27%
Monday 7.89% 14.26% 16.16%
Crowdstrike 14.11% 13.34%
Datadog 0% 7.20% 13.27% 14.20%
MongoDB 0% 15.55%
Cash 3.7% 2.42%

Saul-
I’m sure though that I won’t let my position size get over 25%, as a position size that large generally means that I have turned off my critical faculties, and it usually ends badly.

This last quote from Saul is a great reminder, for me, in regards to my position in Tesla . I don’t recommend anyone hold more than a 20% allocation in any one company. I will redouble my efforts to maintain my critical faculties. I don’t own a Tesla; although, based on my having driven a Tesla Model 3 everyday for a few months, I do recommend the Brand.

This portfolio is what is in my family’s non-taxable Roth and Rollover IRAs only. It contains the bulk of what we’ll live on during retirement. We have not added any money to these accounts for many years. To buy something I’ve sold something else. I don’t trade options or use any leverage. I stay fully invested at all times and keep, on average, less than 1% in cash (presently ~3.7% cash).

“The true investor welcomes volatility. Wild market fluctuations mean that irrationally low prices will periodically be attached to solid businesses.” – Warren Buffett

How I choose to Invest in a nutshell: Because I’m evaluating companies and not trying to figure out how other investors are valuing companies, when I am making my investment decisions, I try to accurately assess: how efficiently each company will ride the combining waves of adoption for their various technologies up the hockey-stick (Hypergrowth) toward their becoming behemoths.

I’m hoping many here will try to point out how and where I am wrong in this last statement. Here are some starting points:

  1. Tesla - measure progress with China EV makers, if you can.
  2. Cloudflare - perhaps Zscaler will develop programmability into their products.
  3. Snowflake- Databricks has the most potential.
  4. Crowdstrike- Palo Alto Networks has been very impressive. Perhaps will they will continue to surprise outside of selling to their base.
  5. Monday.com - Altyrex was a low/no code option to watch or will point and click also be completely eliminated by LLMs?

7/3/23

With my 2.4% cash position from last month, I bought more Snowflake (I had taken it out of Tesla and Cloudflare hoping to invest into Samsara.).

Despite already having a 16% position in Snowflake, I came away from their Summit Conference with much more confidence that Snowflake is a long term out performer. I wrote four post on one thread this month and was the only person who added to this thread😜.

This end to end AI factory that Snowflake has put together with Nvidia as a partner is necessary for taking enterprise specific proprietary data needed to upscale the value created by a basic LLM and create the massive value that Frank Slootman, CEO of Snowflake said (paraphrased by me) is now driving every CEO in every industry to get in line, in order to keep their enterprise relevant.

I decided against buying into Samsara primarily due my feeling that despite their full year revenue being less than $850M (a good thing), their revenue appearing to be 97% subscription based (a very good thing); I don’t see any future catalysts for increasing Samsara’s value add on the horizon and their revenue growth rate significantly decreasing as of late, Samsara is just not as compelling as Snowflake to me. Note: I am aware of Samsara’s last 5 quarters of revenue growth rate, decreasing from 65.7% to 62.6%, and then 52%, 49.2%, and is now 48.3% and is better than the growth endurance of Snowflake over this same period.

I don’t do ‘valuation’ which, in my view, is a fool’s errand. The traditional method, perfect in concept, is DCF, the present value of all future cash flows. It was most useful for bonds where all the inputs are known. The only difficulty is figuring out if the cash flow will be adequate to cover the coupons and to repay the capital but this is relatively easy to figure out. With stocks most of the inputs are just guesses, GIGO, Garbage In, Garbage Out. And this is even more so for growth stocks like TSLA. Can you tell me the expected cash flow from the Optimus Robot?

Valuation is one reason so many people fail at investing. They are using useless tools meant for other securities.

The Captain

“The stock market is a no-called-strike game. You don’t have to swing at everything. You can wait for your pitch.” – Warren Buffett

7/18

My portfolio +60% Year to date.

7/24/23

I added the 2% cash to Snowflake.

My increasing understanding of the importance of Snowflake Containers has increased my confidence in Snowflake as an investment.

POffringa-

Snowflake Container Services provides customers with multiple benefits. They simplify the overhead for developers and data science teams by outsourcing the configuration and management of the hosting environment to Snowflake. Further, containers can access customer data directly within the Snowflake platform, bringing existing governance controls along.

  • Snowpark Container Services is in private preview. It enhances the rapid adoption that Snowpark has already achieved. In his opening remarks, Snowflake’s CEO shared that in Q1 more than 800 customers used Snowpark for the first time. About 30% of all customers are now using Snowpark on at least a weekly basis, up from 20% in the prior quarter. Consumption of Snowpark has increased nearly 70% q/q, after being released just 6 months ago.*

As of the Summit conference, Snowflake leadership shared that over 6,000 Streamlit powered apps with generative AI or ML models behind them have already been built on the Snowflake platform. I believe that if this quarter doesn’t show re-acceleration in revenue growth next quarter will.

7/26/23

I sold 40% of Monday position, to get back to ~4% cash.

I did this to have cash to add to Cloudflare this week or Snowflake later in the month, if there’s a drop after earnings for either of them. Despite Monday looking like a great company to be invested in, if the transition away from point-n-click does happen slower than expected, I feel that base is covered well enough with a 9% position.

7/28/2023

I added 2% of my cash to Tesla.

20% of my portfolio is in Tesla due to my belief that Tesla is currently disrupting the entire automobile industry and their doing this with ~17-20% gross margin, depending on the future Fed Fund Rate, which directly effects car prices. In the USA 80% of cars are ourchsed on credit.

I’d say an additional 14-15% of my entire portfolio is in Tesla due to my belief that Tesla will license Full Self Driving within the next 12-18 months.

Selected users are now being driven by V12. Version 12 is Full Self Driving, alpha. When alpha goes beta and then general release, this could unlock Trillions in additional TAM. The part of this TAM that Tesla captures will be taken at near 100% gross margins from here.

MongoDB remains on my watch list; although, I’m still waiting for a sharp move in a positive direction in revenue growth. Mongo DB gets paid when their customers’ sales go up. IMO, this will happen. I just think this will not happen this next quarte. This is going to disappoint the market significantly. I keep them at the top of my watchlist because I like how their balancing top and bottom line presently.

In contrast and why I have Snowflake and not Mongo is because Snowflake gets paid when customers begin to ramp initiatives, before Snowflake’s customers get paid.

For completeness, Cloudflare, Monday and Crowdstrike are more subscription based and therefore their revenues are not as volatile.

Until any possible licensing deals, Tesla gets paid when they’re selling more model Ys than any other car in the World and they do. Their margin will grow QoQ because of their getting further along in the ramping of two Giga-factories presently and only just breaking ground on the Mexico Giga-factory now.

If I got any of that wrong please email me at JasonEmery.PT@gmail.com

Thanks,

And

Best wishes,

Jason

54 Likes

Jason,

I REALLY like Snowflake as a company but am extremely wary in the current environment with the history of quarterly results. This is a company that has seen a decrease in revenue growth from 110% Q3 2021 to 50% Q1 2023 and is projecting only 38% growth in this upcoming quarter assuming a 3% beat. Customer growth has declined. RPO/customer has declined. Non-GAAP OP has declined the past few quarters. The stock price has been sideways for over a year even while NASDAQ is up 45% (and other tech stocks up way more). I only have a small position at the moment and am on the verge of cutting that to 0% based on the company’s execution (or environment, whatever you want to call it) and the market’s lack of excitement in this company at the moment. If I have learned anything in the past two years its that fundamentals matter a great deal, but so does market sentiment.

Based on all of that, my question is why you feel so comfortable with a large allocation, and increasing it, when the company’s near-term is so dreary? Keep in mind that when I ask this question, it is to get into your thought process, not break you down in any way. I have always respected your posts and viewpoints over the past few years and make sure to read whatever you post. That respect has led me to this question.

All the best,
Marcus

15 Likes

Hi Marcus,

Thanks for the kind words. I don’t pay attention to guidance, unless commentary by management says something about their inability to efficiently sell into the adoption curves as they are. Clearly adoption by Snowflake’s customers was halted over the past year+. I’m often ahead of time in my prediction of how fast adoption of disruptive technology will occur.

I won’t go into my reasons gleaned from years of investigation into Snowflake, Cloudflare or Tesla.

What is inevitable doesn’t come around often. When it does, I’m gonna build as big a position as possible. Saul talks about not trying to time the Market. I’m not going to try and time the adoption of the inevitable. Over the last year, I’ve sold off what I held that I knew was ancillary and not primary to this inevitable future. At one point I got down to three: Tesla, Snowflake and Cloudflare.

In my Portfolio Summary, I wrote-

So, I hope you don’t expect me to go into valuation.

Best

Jason

14 Likes