“short-term valuation - ‘risk management’ is an attempt to predict the short term market fluctuations and, unless you are a truly exceptional trader, IT CAN’T BE DONE. Follow Peter Lynch’s simple advice, “Sell when the story changes or when you discover you have made a mistake buying the stock.”
The Captain
Since the time I began to follow Saul’s advice and 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% |
As Cloudflare and Tesla share price out performed and thanks to what was IMO an excellent Conference Call given by Crowdstrike, I also gained greater certainty in how the coming AI storm will play out. So, I decided to trim Tesla 10% and sell 30% of a ridiculously overweight position in Cloudflare, to add back Crowdstrike.
| Allocations as of | 6/30/23 | 5/31/23 | 4/30/23 | 3/31/23 | 2/28/23 | 1/31/23 | 12/31/22 |
|---|---|---|---|---|---|---|---|
| Tesla | 33.69% | 33.11% | 31.07% | 30.32% | 22.90% | 20.48% | |
| Snowflake | 15.99% | 16.03% | 31.64% | 28.18% | 25.09% | 24.72% | 25.83% |
| Cloudflare | 19.80% | 33.8% | 28.65% | 27.03% | 22.27% | 20.90% | 20.34% |
| Monday.com | 14.26% | 16.16% | 0% | 5.49% | |||
| Crowdstrike | 13.34% | 0% | 4.47% | ||||
| Intellia | 0.49% | 0.91% | 1.45% | 1.19% | |||
| Datadog | 0% | 7.20% | 13.27% | 14.20% | 16.99% | 18.19% | |
| Bill | 0% | 14.70% | |||||
| MongoDB | 0% | 15.55% | 16.92% | 8.85% | |||
| Zscaler | 0% | 1.84% | |||||
| SentinelOne | 0% | 0.03% | |||||
| Cash | 2.42% |
I remain so overweight in Tesla because I feel equally overweight with certainty about Tesla’s future value, as a business. Tesla’s core business has been growing sales at better than 50% for years. And, I believe the value proposition that goes with the Cybertruck will surprise many. And, this will help increase Tesla margins by the end of next year.
But, the primary reason I hold Tesla long term (3-5years) are the moats around Tesla. IMO, Tesla’s innovations in manufacturing processes remain up against the innovators dilemma among all of their competition (Although admittedly, I have little insight into those inside of China).
Also, I see Tesla building out a platform (in the foreseeable future). Tesla has begun to lend out some of the excess capacity for what they’ve had to build out themselves, in order to be as successful as they are (see recent Tesla charging network developments.). I believe, the Tesla platform will be made available to their competitors (as was similarly done by Amazon, with AWS). Then we’ll see SaaS type margins along with recurring revenue.
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 less than 1% in cash (presently ~2% cash only because I’m looking to buy some IOT).
What I did and why I did it.
6/5/23
I sold 30% of my 33% position in Cloudflare, thinking I’ll likely put the money into Crowdstrike.
I’m really liking what the ER from Crowdstrike added to the press release about Charlotte. My biggest take away, from the Crowdstrike Earnings Call, is that I’m much more clear on what Crowstrike has been doing over the last ten years and it was not about their use of an LLM😂. The reason I’m happy, to be an investor again, is that Crowdstrike management clearly understands how to use AI in all aspects of their business.
George Kurtz, Founder and CEO in Q&A:
Well, it’s something that’s really foundationally built into the platform and we believe it’s going to drive a lot of additional adoption of modules and platform usage throughout the customer base. So we’ll start there. As it evolves over time, we’ll look to see if we will monetize it …, but I think first and foremost let’s get into the customer base, let’s iterate it, let’s leverage the data advantage that we have because as I’ve talked about in the earnings call, we’ve got 10 years of being able to train these algorithms and I think as most know, it really is the human interaction that allows those LLMs to shine and we’ve got I think a real advantage because we’ve got 10 years of attack pairing, if you will, with data and how the attacks work that can be used for training. So we’re going to get it out in the customer base, continue to iterate it. And then I believe it will drive more adoption of the platform modules and then we’ll see how we’ll monetize it after that…
George Kurtz, Founder and CEO, Later in Q&A
…So from our standpoint, we believe the pairing of the Threat Graph with annotated threat data over the last 10 years is, and will continue to be, a sustainable advantage of barrier entry because we’ve already done a lot of that kind of human training and we can take advantage and interchange LLMs within our own dataset to provide the best outcome depending on what we’re looking for. So we’ll leverage what’s out there, we may build some of our own, but I think more importantly, we’ve got the right dataset to get the training, the way we need it
I believe Crowdstrike Management gets AI and will lead the Market into the future. Understanding that the greatest amount of benefit from LLMs is added when there is fine tuning and constant iteration of the AI, something Crowdstrike is well positioned for in the security space.
6/7/23- I bought a 10% position in Crowdstrike for $153/share.
6/16/23
I sold 10% of ~38% position in Tesla@$267/share resulting in a ~4% cash position.
Despite my trying to rationalize otherwise, I’m up against feeling like I have too much in one Company. I plan to add this to Crowdstrike opportunistically the next week or so.
6/21/23
I put the ~4% cash into Crowdstrike @ a cost bases of 149/share.
6/29/23
Trimmed a little Tesla and Cloudflare to maybe initiate a lookeysee 2.4% position in Samsara, IOT (cash at this time).
I did this after rereading many of the posts here on Samsara. Saul saying this is his largest at 16% and special thanks to both LisaCloud9 and SJO.
MongoDB remains on my watch list; although, I’m still waiting for a sharp move in a positive direction in revenue growth. IMO, they made a respectable move toward greater profitability, this last quarter.
Thanks,
And
Best wishes,
Jason