kip: 6/2/2019

Speaking of portfolio updates…

My first portfolio post was in February so it’s clear I’m not sharing monthly… My original intent was to share quarterly but a couple things got in the way. First, life is busy, good busy. Second, I don’t have a lot of technical or fiscal insight to offer above what the group here are already sharing. All I have to share is my story, a bit redundant in the portfolio space to all of you. But I’m willing to share. I appreciate all who share on Saul’s Investing Discussions.

Portfolio changes since February

Before my February post I had spent a year consolidating 57 stocks to 21. I now hold 14. A 33% reduction, aka a 33% increase in conviction!

I must say, holding fewer stocks is a breath of fresh air. As a guy who checks the market almost daily, or multiple times on many days, and tracks portfolio performance weekly, well, having 14 to track instead of 55 has unleashed my analytical and critical thinking. I’m WAY more comfortable with my portfolio because I know my holdings in so much more detail. I’m early in the ‘concentrated portfolio’ game but unlikely to ever do anything else. For the first time ever I feel like I understand the ins and outs of my portfolio, the potential. The risk.

The hardest stocks to let go of were my legacy FANG holdings of AMZN and NFLX. I held both for over a decade. NFLX was easier to sell as a company – I see a LOT of competition coming for their lunch. But emotionally I stalled. It was my best investment, ever. I bought at ~$7 when Blockbuster pissed me off on a late return. Isn’t it a Buffet quote? – ‘buy what you know.’

I’m certain AMZN will take over the world. This company (or maybe GOOG) is Skynet, we just don’t see it yet. At some point they’ll cross a threshold with the politicians and be summarily splintered, or splinter the politicians. At that point I want to have the AWS piece. Don’t we all?
After using WIX for a couple years in my day job I dumped the stock. No path to profitability or significant growth, at least not in comparison to other choices discussed here. I also dumped NEWR after less than a year. I was treading water. I finally jumped off the NTNX wagon, perhaps the nail-in-the-coffin for my LTBH upbringing. It cost me a bit to hang out after most of you jumped off and I appreciate the price of my education.

Buys and sells
I got in on ZUO and STNE, then I got out. Part of my learning curve… As I said in February, I often play the jockeys not the horses. A couple folks I read and follow were really high on those two, I didn’t do enough of my own research. Small losses, huge lesson learned. Thank you.

I added two that aren’t widely touted here, HUBS and ZEN. I use HUBS in my day job and it has been a game-changer for our small business. ZEN is in the same orbit. Small positions both.

Like many here, I also added SMAR and ESTC. Of the two I’m more certain of ESTC. Big data is in early innings and any company that makes data analytics more accessible has unknown runway.

For those of you who follow Bert I also took a bit from him and added TEAM. Actually, it was a friend of mine that flipped me to ‘buy’ on TEAM. My friend is just starting her investment journey and she’s been asking me lots of questions. She’s in mutual funds today, interested in learning more. I brought up TEAM and Trello, Trello being an app my small company is using for more and more things each week. She mentioned her much larger company (a Fortune 100 accounting firm) is using Jira and it’s the bomb. That was the proverbial straw and I started a position the next day.

The Six
Like many, my largest positions are in MDB, ZS, TWLO, TTD, AYX, OKTA. I’ve probably read too much science fiction and fantasy since I picture these as ‘The Six Horsemen of the Data Revolution,’ or something. I added small bits to most of them in the last four months. Together they are ~65% of my portfolio. I’m ~10% in cash (my rainy day fund and psychological cushion) and the other eight positions I hold are the remaining ~25% together.

I expect one or more of these six to be the ‘FANG’ of the next decade(s). I need one of them to run over the next decade like NFLX did for me over the last decade and I’m good. Work will be optional sooner than later, and retirement will be full of choices. There’s my LTBH coming through again…

Going Forward
I plan to get more fiscally literate over the summer. I’ve been through the Knowledgebase a couple times and plan to reformat it as a web page with links and an index for my own use. Or to share – I’m sure many of you could do the same much more quickly, but I learn best by doing things myself. That’s why the original Fool brought me here – to entertain, educate and amuse – and to learn to fish for myself. With any luck and attention to the world around me I might bring a new idea for you all to consider, too.

Carpe Diem.