Jason’s March Portfolio Summary

My performance for each of the last four years, since I started trying to follow the rules/principles in Sauls’ Knowledge Base and his chosen posts in the Right Side Panel, here.

2021 > +46.8%
2020 > +203% 
2019 > +32.9%
2018 > +38.9%
2021>.     Month.          YTD
April >.   +13.56%        +1.37%
May >.     +5.35%.        +6.8%
June >.    +15.2%.        +23%
July >.    +5%.           +29%
August >.  +24.3%.        +60.5%
Sept>      +2.9%          +65.22%
Oct>     . +16%.          +91.7%
Nov>.     (-)14%.         +54.38%(given in error).  Actual YTD 64.8%
Dec>      (-)11%          +46.8%

2022>.     Month         YTD
January: (-)22.3%        (-)22.3%
February:   6.4%.        (-)17.3%
March:   (-)1.77%.       (-)18.8%
          Mar 31 Feb 28 Jan 31  Dec 31 Nov 30  Oct 31. Sept 30.  Aug 31. July 31. June 30
Upstart     **3.76%** 14.25% 10.47% 11.28% 11.73%.  25.27%  27.52%.  22.47%. 14.76%.   13.85%.  11.39%. 0%.
Datadog.   **17.39%** 14.53% 17.54% 16.60% 16.28%.  11.91%  16.39%.  16.43%.  16.42%.  16.21%.  16.63%. 16.83%
Cloudflare **19.24%** 18.38% 15.22% 13.48% 14.06%.  13.23%.  9.33%.  14.45%   17.60%.  16.48%.  18.92%. 25.12%
Monday.    **14.52%** 13.44%.15.08% 14.39% 17.92%.  10.37%.  8.72%.   0%.      0%.      0%.      0%.     0%
Lightspeed. 0.0%.  0%.    0%.    0%.    0%.      9.75%.  8.78%.   4.40%.   0%.      0%.      0%.     0%
Zscaler.   **13.85%** 10.79%. 9.26%  8.99%. 8.64%.   7.06%.  6.51%.   0%.      2.75%.   0%.      0%.     0%
Snowflake  **21.04%** 11.98% 13.25%.12.69% 11.35%.   8.84%.  7.51%.  10.32%.  12.67%.  12.10%.  12.20%. 15.68%
ZoomInfo.   **0.0%**   9.87% 12.69% 11.11%. 9.22%.   6.72%.  7.09%.   7.75%.   7.98%.   8.12%.  10.50%.  6.32%
Crowdstrike **3.91%**  6.6%   6.51% 11.45%. 10.81%.  6.84%.  8.14%.  19.12%   21.50%.  22.36%.  24.19%. 24.05%
Docusign.    0.0%.  0%    0%.    0%.     0%.      0%.    0%.      6.32%.  10.88%    6.46%. 7.75%
[Bill.com](http://Bill.com)    **5.21%**.  0.0%
Palantir    **1.09%**.  0.8%

Watch List:

My Peak November 2, 2021 to trough Mach, 14 2022 = 4.5 months (-)56.7%.. Percentage wise this was the largest drop I’ve experienced since the 2008 Financial Crises, when my portfolio dropped -68%.
Over the four years since I’ve been trying to invest utilizing the principles Saul recommends, I’ve experienced 1-2 30%+ drawdowns each year. I never went to cash, staying fully invested throughout. I did the same this time.

It was after that 68% drop in 2008 that I decided to get out of Mutual funds and start learning to value individual companies (at the time I’d heard Soros say something like, ‘learning to value a company’ was what he was good at doing). I read many books on the subject. My opinion is that when compared to Saul’s Knowledge Base, there just is not much else that’s going to help with as many aspects of investing, especially regarding investing in hyperGrowth companies.

On March 14, the time of the this most recent trough, I made many changes in my portfolio as y is described below; but, I stayed fully invested. And three days later, on March 17th, the total value of my portfolio went up +23.5%!… and just one day after that, after four days from the trough, my total portfolio is up +31.3%!!! There’s no way I could have timed that.
Over the last four years, staying fully invested has repeatedly paid off, extremely well. Before I retire in three years, I intend to take Saul’s advice and take out at least three years of expenses first. Thanks for all the great advice Saul🙏.

When reading the following keep in mind that this portfolio remains ~95% of what my immediate family will live on in retirement. This portfolio is what is in our non-taxable Roth and Rollover IRAs only. 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 less than 1% in cash.

6.5 Decisions this month.
If I did not see myself as a long term buy n hold investor (at the time of purchase), I may have sold everything to buy Affirm when at $26​:thinking::person_shrugging:???. I didn’t do that because when I invest I plan to hold for the foreseeable future.
What I did:
I sold ~25% of my 19% position in Cloudflare @$117 to add 50% more to my 12% position in Snowflake, at $207 after reported earnings.

Why I did it:
IMO, $1.2B in contract value QoQ, more than TTM total, is an amount that justifies us saying ‘the floodgates have begun to open’.
I believe +$1.2B added to their bank account just this quarter does make announcing the Guide difficult to say with a straight face😉.

What I did:
A couple days after Crowdstrike earnings, I sold half my 7.5% position in Crowdstrike to add ~25% more to my 10.5% position in Zscaler and add a little to Monday.com as well.

Why I did it:
I agree that Crowdstrike will continue to be a 60% grower and is a phenomenal company doing all the right things to grow their TAM and take share. I expected proof of re-acceleration in their business. Flat wasn’t good enough for me, perhaps I’m a bit emotional about this one.

What I did:
I sold the remaining 3.75% position in Crowstrike to buy ~15% more Datadog, ~10% more Cloudflare and ~25% more Upstart @$102.

Why I did it:
As is often the case, when I am convinced to sell most of something I tend to follow my own advice and end up selling all of it. Hanging on to a little won’t move my growth needle😉. These other higher confidence positions were on sale, IMO.

What I did:
I sold what had grown into a 12% position in ZoomInfo @~$51 and I bought 30% more Snowflake @~$170, already my number one, making Snowflake my largest at a 20% position. I also added 20% more to Datadog and bought 18% more Cloudflare. And I added ~10% more Upstart with what was left, keeping Upstart my smallest position at 13%, all of them at firesale prices, IMO.

Why I did it:
ZoomInfo had not dropped as much as the others and although ZoomInfo was near a full position, having a high level of confidence for me, I had more confidence in the others. I’ve learned from Saul to consolidate into higher level confidence positions in market down-turns. On Saturday 3/12/22, Saul wrote a post stating he’d sold his ZI ‘too soon’ (at least that how I read it). Many here read the post the same as I did. Fortunately, I sold out at 7am California time. Thanks Saul, for all the investing advice and the occasional reminder when one stock doesn’t fall as much as the others on no company specific news.
I did not add to Monday or Zscaler, each remaining at 14.5% of my portfolio, so now I’m down to six and a ~1% position in Palantir😎.
After these trades:
Snowflake 20.65%
Datadog 18.19%
Cloudflare 17.96%
Zscaler. 14.51%
Monday. 14.47%
Upstart. 13.10%
Palantir. 1.12%

What I did:
I initiated a ~5% position in Bill.com, @ $217.75. I got the money from Upstart today @$128/share.

Why I did it and some seeming contradictions:
It took me a while to find something to sell in order to initiate this position in Bill.com. I’m convinced that Upstart will mushroom into a behemoth, just might take 3-5 years (I’m habitually looking out 1-3). After Bills’ last quarter execution, my thinking Bill as too complicated was overcome. I’ll just say here how Bill collects money from their customers is different. What I like most about Bill.com is what I believe they will grow the most from here, transaction fees. My understanding is that transaction fees are also 80% recurring for Bill. And the mushrooming, the significance of the exponential growth, of transaction fee growth, has begun. Since posting their last quarter numbers, the number of customers and the amount that each costumer is transacting on Bill’s platform is now large enough for me to be interested. And Bills’ TAM is big enough (Bill has penetrated only ~4% of their TAM) if anyone can really measure TAM🧐well.

I see a lot of people here referencing the “Law of Large Numbers” when explaining why they’re getting out Crowdstrike or not staying in Snowflake. Both these companies are growing into an enormous market and expanding this with new offerings. What am I missing?

Sometimes, as I believe is the case with Monday.com, the numbers can grow really fast; but, the numbers are just too small for many Market Makers to see the significance. So share price stays excessively volatile due to the lack of these larger investors. With this some here would say, “Volitility is our friend”. I’m agreeing with this. We are the smart money here.

I agree with Saul, shocker, that Jonwaynes review of a couple recent conferences here, https://discussion.fool.com/bill-march-8-and-9-conferences-35069…, does construct a surprisingly cohesive understanding of this company. Thanks again Jon.

Upstart and Bill.com are doing everything right to grow their businesses into massive markets and are both executing masterfully well in their respective categories. I also believe Upstart is more likely to surprise the Market, to the upside, more so than Bill.com. So although my argument is that the numbers are currently beginning to mushroom for Bill.com, I’m leaving Upstart at ~9% while Bill will remain at~5% at this time because the predictability of Upstart is less🤔 (it’s when the market is positively surprised that the share price needs to correct upward). So in part because Upstart has little to no recurring revenue, I’m betting that Upstart will surprise the Market more than Bill, when eventually Upstart reports surprisingly large revenue growth.

As far as getting back into ZoomInfo, I believe the market knows how great it is and may never value it as high as Bill.com or Upstart. Talk about range bound, ZI today is at $56.54. On 3/14/22, I sold my 12% position of ZI at $51 to buy a lot of everything else, in the time ZI ran up from $51 to $56, when I moved this ZI money, the rest of my portfolio moved up +31%! Thanks again Saul, for teaching by example the benefits of consolidating around high conviction in a down-turn on non-company specific news.

I have a 1% position in Palantir. Palantir’s founder led. Their revenue growth at last Q CC was +41% YoY @ $1.54B total Annual Revenue, with 78% NonGAAP GM, Net Dollar Retention Rate of 131%, 28% FCF margin, FCF positive and no debt. I’m thinking they could rapidly accelerate if they get their GoToMarket right or maybe it’ll remain niche due to their product requiring too much hand holding to scale the number of customers. Total number of customers grew +71% YoY; but, this may not state how meaningful this is without them breaking down the types of customers more than they do. Their Conference Call was difficult to listen to, no matter how skilled their CEO is at getting US Government contracts, his ability to communicate on a CC is horrendous, IMHO.
Nonetheless, I’m interested in learning more about Big Data Operating Systems. VMWare, Snowflake, Datadog, and Palantir are in a small group of companies developing into this area, what I call the SupraClouds. I think it’s more accurate than SuperClouds, which I’ve only seen here or there. And SupraCloud is more descriptive than Big Data OS, IMO.

The best elevator pitch I’ve heard for Palantir is from surfingpapi. In parentheses is me.
Analyzing their technology stack and competitive landscape, there at the top of the (Data-Prep for Analysis) industry. Their Foundry platform integrates many open source technologies seamlessly so technical and non-technical people can use their platform. Additionally, (Palantirs’) Apollo (Cloud Offering) and their Software-Defined Data Integration of the entire stack will give them a competitive advantage in the Big Data OS race. Their becoming (progressively)open-source friendly and are building out a developer community that will reduce the burden of being a consultant type of company. Some risks are their ability to scale their platform and modularize to offer productized (sector specific)compute (as Snowflake is doing).

If that isn’t clear as mud💩. I’ve said in past monthly summaries that I try to invest only in Cloud Category Crushers. I’m investing 1% of my portfolio in Palantir for a different reason. It’s because I believe Palantir could begin to take share rapidly and am at least willing to bet a smidge on Palantir becoming one of the leaders in the Big Data OS space.

What I did: I sold 1/2 of my ~7.5% position in Upstart @ ~$107 and bought back into Crowdstrike @~$221.

Why I did it:
There’s been some great up to date analysis done, at Stockmarketnerd.com, on the continued bullish arguements for Upstart. I do believe Upstart is growing their ability to efficiently take share in personal loans and Auto. I’ve also re-read much of what’s been written here on why Upstart may not be able to quickly enough grow share into the auto market and I now believe the auto market is itself slowing down (people waiting to buy electric cars and Full Self Driving taxi’s now in some US Cities). Upstart having little to no recurring revenue , I just don’t have as much confidence in Upstarts’ 1-3 year future as I once did.

As I said above, I believe Crowdstrike is doing everything right in order to continue to take share in their expanding market. They are the clear leader in End Point Protection and are expanding the offerings on their platform at exceptional rates. With Revenue growth leveling off in +60% territory and with 30% FCF margin, I’m happy to be back in. I’m looking to add here.

As a habit, when I make investing decisions I’m thinking out 1-3 years. When I do make a short term decision, it’s almost alway based on an obvious market disconnect between how the companies were performing and a share price over reaction based on something outside of what the companies were doing.

Heartfelt thanks to those following the rules of this great Board! I’m grateful to be one in a group of individuals who’ve come together with these rules as an agreed upon standard.

Special thanks to Saul and all the Board Managers for insisting on these now absolutely necessary standards of conduct. https://discussion.fool.com/monday-morning-rules-of-the-board-34…

2020 Portfolio Summaries here: https://discussion.fool.com/jason8217s-2020-port-review-34708368…
2021: Porfolio Summaries here: https://discussion.fool.com/jason8217s-december-portfolio-decisi…
1/31/22 Monthly Portfolio Summary here: https://discussion.fool.com/jason8217s-january-investing-decisio…
2/28/22 Monthly Portfolio Summary here: https://discussion.fool.com/jason8217s-feb-investing-decisions-3…