mekong22 Aug 2020 portfolio update

Like many things this year, August for my portfolio was a roller coaster, chronologically, it can probably best be summed up for my own port as:

It was the worst of times (AYX)
It was the best of times (NTNX)

Yes, AYX was one of my biggest holdings going into August and, largely driven by the drop in Alteryx, my portfolio dropped about 15% the first week of the month.

Then mid-month, I made more significant reallocations in my portfolio than I’ve made in a long time (which granted, for me, still isn’t very much, but a lot more than I usually do). I trimmed some of my MDB, a little worried that they will run into some of the temporary headwinds that AYX saw this quarter, limiting major new sales for a little while. I sold the last of my LVGO, by chance, just before the TDOC deal was announced. I later bought my first TDOC shares. I increased by stake in GH. I added a little bit to my DDOG and to NTNX. I bought, and then later sold off, a new stake in FSLY. Oh yeah, and I sold some of my AMZN shares for the first time in several years!

I also missed an opportunity this month, having identified that SMAR looked like it hit a great buy-in point around $41-42, which I posted my analysis to the board on Aug 7th, but I didn’t follow through with a purchase, and the stock quickly ran up about +30% over the next couple of weeks. You can’t own them all!

Then Nutanix ended the month last week with a good earnings report, as well as two surprise announcements, which drove up my investment enough to more than offset the AYX declines earlier in August.

And now, some of the earnings announcements coming up this week, could make September just as interesting, as MDB, CRWD, DOCU, and SMAR all report on Wednesday and Thursday.

While still paling in comparison to the amazing success many of you have had this year, I picked up another 8.3% in August, to +57% Year to Date now. Just a hair below the 57.1% that my portfolio gained last year for the full year 2019. As always, this excludes the impact of any new funds added or withdrawn.

End of Jan 	+15.5%
End of Feb	+ 7.0%
End of Mar      -20.0%
End of Apr       +0.6%
End of May      +27.0%
End of Jun      +40.0%
End of Jul      +48.7%
End of Aug      +57.0%

Most of August’s increase resulted from NTNX gains, partially offset by AYX losses, but also contributing to the increase were nice gains this month from AMZN, GH, and to a lesser extent, TTD and TDOC.

And here are my latest allocations, with comparisons to last month:

       7/31/2020   8/31/2020
NTNX 	 11.5%	    20.6%
AMZN	 20.6%	    18.9%
TTD	 11.9%	    11.8%
MDB	 14.3%	    10.2%
AYX	 19.4%	     9.9%
DDOG	  6.0%	     5.9%
GH 	  0.4%	     5.4%
CRWD	  3.4%	     3.9%
DOCU	  3.9%	     3.8%
TDOC	   -	     3.5%
OKTA	  3.6%	     3.4%
ESTC	  1.6%	     1.9%
KMI	  2.6%	     0.9%
LVGO	  0.8%	      -

Nutanix – I’ll start by asking, at the request of the board mod’s, that any follow up discussion that we want to discuss about NTNX, be kept offline, so any comments, please email me directly (uncheck the “post this reply to boards” box and check the “Email this reply to the author:” box). Or for those of you with access, we can discuss on the premium Nutanix board.

My thoughts are still already covered pretty well from my May portfolio summary:…

and the summary of their earnings and announcements last week:…

I added a small amount to my NTNX holdings this month, but most of the August increase is due to gains after Thursday’s announcements (shares and calls).

Amazon - Yup, I finally sold some Amazon this month (cost basis was around $300/share) and will pay the taxes. I sold about 12% of my AMZN shares. The stock price rose about 9% this month, so my Amazon holdings are still almost the same as last month, $-wise, even after selling those shares. I may sell a little bit more later this year, but most likely won’t be too significant unless I anticipate some bigger macro things going on (future tax changes etc). I love shopping at the Amazon Go stores. It really feels like you’ve stepped into the future. And they just opened some of their first, non-Whole Foods, Amazon grocery stores this month. They continue to rely less and less on third party shipping services, reducing costs. Despite their size, there still may be plenty of growth and expansion opportunities ahead.

Alteryx - As we know, Alteryx faced some significant headwinds from covid this quarter and those are likely to continue for a little while. That being said, I think the correction in the stock price was overdone and I will likely be adding to my AYX stake as some funds become available next month. The massive growth of data and the need to quickly and efficiently analyze it is not going away anytime soon and will likely grow by leaps and bounds in coming year. According to my own calculations, if AYX’s revenue growth stays depressed for the next 12 months and only grows by 10% for the next year and then resume growing at 30% for a couple years, today’s stock price will appear to have been a bargain in retrospect. However, I do think they will do better than only +10% over the next year. This is a company I’ll be looking pretty closely at the pricing of the new LEAPs when they come out in September.

The Trade Desk - I’m as surprised as anyone that TTD’s stock price has held up, in the short term, as well as it has given some of the headwinds. But I think some of the pandemic headwinds will turn into tailwinds over time as, despite overall advertising being negatively impacted this year, the transition from traditional ads to programmatic got a shot of adrenaline in 2020 that will continue in the future. The current valuation is probably being held up by an expected boost for political ad campaign spending in Q3 and Q4, which might ultimately disappoint. I’m not buying more right now, but would consider adding to my position on any significant pullback, which wouldn’t surprise me at some point in the next two quarters.

MongoDB - While I still believe strongly in the long term story and I think holding MDB for the next five years will work out really well for owners, as I mentioned above, it won’t surprise me if they have more of a negative short term impact than expected, similar to what AYX saw this quarter. So I did sell off some of my MDB in August. It’s still one of my biggest holdings and I don’t plan to reduce it further, but I’ll be watching earnings this week closely. Similar to my Alteryx comments, data is growing by leaps and bounds and needs better and better ways to store, categorize, etc that data, and that’s what has led the move to NoSQL, and MDB still appears to be the leader in that space.

Rumors of Oracle (owner of SAP, the beast of traditional SQL database competitors) potentially buying TikTok’s U.S. operations makes me wonder if their focus is spreading to areas outside databases more and more, potentially opening the door further for NoSQL db’s like MongoDB to take further market share.

Datadog - What else can I say that hasn’t been covered on this board well already. Datadog is firing on all cylinders and I expect they’ll continue to perform. I bought a little more DDOG this month. Don’t be surprised if I add more to it in the next few months, especially if there is much of a pullback at some point.

Guardant Health - A few weeks ago, before I had bought any Fastly, I spent a morning researching FSLY and somehow turned my attention to GH, which has been one of my lowest conviction holdings for a while. I still can’t recall how my focus switched to Guardant that morning. Maybe the stock price was down a few points and I had some spare time to take a look? I really don’t know, but the timing was fortunate as I concluded I should have more invested in GH and built out the position a bit. I also posted my thoughts, incase anyone is interested and missed it earlier in the month:…

The timing was lucky because only a few days later their earnings release showed revenue growth stronger than I was expecting (I actually expected a revenue decline due to clincs being temporarily closed during the pandemic) and then the FDA approval for Guardant 360 came through, so I bought a little more. Then the stock price inexplicably dropped to $79 and I couldn’t help myself and added additional shares again. A few days later Guardant announced they received emergency FDA authorization for a covid saliva test that the company had originally only developed to test their own employees and improve safety within the workplace. The covid test probably won’t result in much revenue or income. The company has said they it is the responsible thing to do to make the test available to more of the public, as long as they don’t lose money on it.

But this showed me that, not once, but twice, they successfully navigated the FDA approval process in a short period of time. Especially considering that the covid test is not even within their, blood cancer screening, core competency, it gives me confidence that if things go well for their LUNAR program products that are in development (to screen for early stage cancers), the FDA process won’t be a major obstacle since they have some experience with the process already, successfully. Although I wasn’t planning on buying any more GH, that convinced me to add a little bit more, one more time this month. It’s run up pretty nicely since then, nearly at $100/share already, but is still a relatively small, only about 5%, holding for me, and I doubt I will add to it further, but it’s the type of company that you only need a small investment (I was originally only planning to put around 1%-2% in GH before I felt some of their announcements weren’t being factored into the valuation enough), and if they are successful, it could do really well.

Competition will be fierce in their market, with much larger competitors out there also trying to be the standard cancer blood screening technique, but Guardant has a huge amount of cash and marketable securities to last them several years at their current burn rate, so they’ll certainly have a good opportunity to let it play out. Also, given the nature of the industry, there is always a chance that they get acquired at some point, although I hope that doesn’t happen at least for a while.

Docusign - DOCU has been one of my best performers over the past year. Wish I had bought more last summer. I sold more than half of it earlier this year as I thought the valuation was getting frothy, but the stock price continues to rise. It still looks expensive to me now and I don’t plan to add to it further, but will probably just hold the rest of my shares and hopefully let it play out over the next couple of years.

Crowdstrike - déjà vu, also been a great performer for me, and I wish I had bought more. CRWD gets covered well here so I won’t add much, but looking forward to seeing how earnings look this week

Teledoc - Although I typically, probably, over-value the importance of quantitative analysis when deciding what stocks to buy and sell, TDOC is one I bought a decent little stake in without really spending much time on the numbers, it was somewhat of a “gut” buy. I had already been thinking about buying some TDOC before covid and before the LVGO deal as it just seems like it fits into a macro future really well. Since I don’t know a thing about how medical cost finances, insurance reimbursements, etc work, that kept me on the sidelines from TDOC for the past couple of years, unfortunately. When they announced the LVGO acquisition, and then the stock price dropped from $250 to $185, almost immediately, and reading some of the great commentary and discussion here and from Bert, it prompted me to just go for it. This was when I actually sold a portion of my AMZN shares, which were partially used to fund the TDOC purchase. I probably won’t add more, or sell any until we start to see what the financials of the combined company will look like and what management projects. As many have noted here, there will probably challenges and some disruption from combining the two companies and could take time for the synergies to work, but I’m comfortable holding and letting it play out.

Okta - I was planning to listen to Okta’s earnings call on Thursday and dive into the results as it was my only holding planning to release earnings that day…then NTNX came out with their surprise announcements and I honestly didn’t drill into OKTA’s quarter that much besides reading some of the good coverage here. Okta is another one that I like and will probably hold for the foreseeable future. I’ll be interested to see how they trend in 2021 without the pandemic situation.

Elastic N.V. - Elastic’s earnings were received well this month and, in the past few weeks, ESTC has risen from $82 to $108, a nice little run. I’m happy to continue to keep a small amount of my portfolio in Elastic and let it continue to play out, but unlikely I’ll build this up into a larger position anytime soon.

Kinder Morgan - KMI, a natural gas pipeline operator, was one of my bigger holdings at the beginning of the year. Like many energy stocks, they have been pummeled during the pandemic. It’s still a strong company, with really valuable assets (that will become increasingly valuable as it has been more and more difficult to build new pipelines lately). Berkshire Hathaway just bought similar pipeline assets from one of their competitors last month. I’m sure they will do well in the future and the stock might turn out to be cheap right now, but I don’t plan to invest more in KMI. Too many better opportunities out there.

Fastly - Although FSLY is nowhere to be seen on my portfolio allocations above, for July or August, I did own it for a while this month. I bought a Fastly stake in early August at $77 and change and then sold it last week when the stock was on a nice little run, getting just over $97/share for them. Somewhat lucky with the timing on both sides, and even luckier that I put the proceeds into NTNX last week right before it popped. Fastly has been a great company, but I just don’t have the conviction in it, to keep a significant stake right now.

I’ll be watching Alteryx’s stock price pretty closely this month, possibly building that stake back up. In addition to earnings from MDB, CRWD, and DOCU this week, I’ll also be interested in seeing SMAR’s results when they report on Wednesday. If the news is good, Smartsheets’ stock price may run away from me and I’ll kick myself further for not having gotten in, in early August when I was considering it. Who knows, maybe the results will be weak and I’ll be better off not having bought it. If this year has taught me anything, it’s definitely that you sometimes never know what to expect, both in company results, and in how the market responds to them.

That’s it for now. Congrats to everyone who continues to have a great investing year.

Take care and stay safe



Hi mekong22. Lovely post and insights. I do think AYX will outperform much more than 10% due to their vision to their business model. Could you please share your current portfolio? I would like to compare with mine.

Stay safe

Hey mekong, thanks for posting.

We agree on many companies – MDB, TTD, AYX, DDOG, CRWD, OKTA and LVGO represent ~36% of your portfolio and ~54% of mine. I ditched my AMZN a couple years ago. Or what was left of it and some other FANGs after buying my home :wink:

We disagree on FSLY, I’m a fan, and on KMI which I sold several years ago.

Again, thanks for sharing. I learn from your ideas and analysis, and from comparing it to my own.