mekong22 October 2021 portfolio update

Only one of my companies reported earnings this month and, beyond that, I only made a couple smaller transactions, so this will be a brief writeup this month.

MongoDB (MDB)

MongoDB (MDB) somehow just keeps climbing to new heights, closing the month at more than $521 per share, up more than 800% since I bought many of my shares just over three years ago for about $57! MDB has moved back up to my largest holding, despite my selling about 10% (2% of the portfolio) earlier in the month.

Although Mongo is the only one of the companies I currently own that I would consider pricey, valuation-wise, I do think the long term future is bright and they will keep growing enough to justify my holding a big stake in them. I sold the portion of MDB that I did due to a combination of wanting to add even more UPST when it dropped back into the $320’s this month, at the same time that MDB was getting into nosebleed territory, so it just felt like a good opportunity to reallocate a little bit.

New Position…Applovin (APP)

My small “try-out” position has now shifted twice in as many months. I put about 2% into two months ago, and then last month decided I liked the opportunity in Global-e more, and sold my and bought some Global-e, and then early this month, I decided that the supply chain situation at the ports in California seems like a potentially big (althought probably short term) risk for Global-e and sold the GLBE and moved it into Applovin (APP).

Somewhat lucky timing, it’s been good so far as I sold my Global-e at $71 three weeks ago ($57 now) and bought APP at $80 (now $98 already, up 22%+ in those same three weeks already)

One of Bert’s Ticker Target writeups put Applovin on my radar (another great example of why Bert’s newsletter is worth the subscription price many times over…if you don’t already subscribe, consider it)

I just posted an intro post on Applovin here:…

I was writing it into this monthly portfolio update and then decided it had gotten long enough that it probably deserves it’s own thread and will hopefully get noticed by more people following them.

It definitely seems to be a high risk, high reward situation, which I’m unlikely to increase my holding much from where it is until I get more familiar with their business. I had been considering selling of the small try out position in APP completely this month when I wanted to add to Upstart before ultimately trimming the MongoDB to free up the funds. So while I’m thrilled to be up 22% on Applovin already, it isn’t near the top of my confidence positions. They report earnings November 10th so I’ll probably hold at least until then and see how things are progressing.

One other small transaction this month, I sold off some more Smartsheet (which is now itself down to a small, “try-out” size position) and added to my Teladoc when TDOC had dropped all the way to $120/share. I’ll comment on Teladoc’s earnings a little below. Interestingly, the stock was down -5% after earnings, as well as premarket the next day, and then proceeded to rise nearly +10% once the market opened and is up to about $150 now

**Year To Date Results by Month**

Here’s my latest YTD performance:

 +5.0%  YTD Jan 
+14.6%  YTD Feb 
 -9.2%  YTD Mar
 -8.2%  YTD Apr
-19.7%  YTD May
 +7.9%  YTD Jun
 +3.8%  YTD Jul
 +5.6%  YTD Aug
 +7.2%  YTD Sep
+10.5%  YTD Oct

So I picked up a few percent this month. The short version is that Teladoc had a nice +18% increase in October, and MongoDB, Docusign, and Trade Desk all rose between 7-11%, and those gains were partially offset by my two largest holdings Magnite and Nutanix, both dropping on no news this month.

October 31, 2021 Allocation by Holding

MongoDB (MDB)	       16.3%
Magnite (MGNI)         15.5%
Upstart (UPST)	       15.5%
Nutanix (NTNX)	       13.0%
The Trade Desk (TTD)   12.8%
Docusign (DOCU)	       12.1%
Teladoc (TDOC)         11.0%
Smartsheet (SMAR) 	1.9%
Applovin (APP)	        1.8%

Not too much to add as I covered the transactions for the month above. I had sold about 10% of my MongoDB (2% of the portfolio), so it would have risen to close to 19% of the total had I kept the same number of shares I had at the beginning of the month, but I was happy to shift some of it over to more Upstart shares.

Teladoc earnings

My first company to report so far this year was Teladoc and the thing that jumped out at me was that they gave a preliminary number for 2022 guidance next year and it was less than 30%, which was definitely lower than I was expecting.

They’ve been growing 100% or so most of this year, but much of that was due to the Livongo acquisition, so not organic. While I expected next year’s growth to be much less, I was still looking for 40-45% next year. I assumed Livongo would still be growing well above that, plus some lesser growth from legacy Teladoc, and then throw in some cross selling.

After market, the stock was down -5%, but then it rose close to +10% once the market opened so I guess others didn’t view results or guidance quite as pessimistically as I initially did. I really didn’t hear a lot of excitement on the call by management either. Certainly the valuation was sooo low, that maybe the 30% was really above where some analysts were expecting. Or maybe they just like certainty and were happy to have some guide earlier than expected.

Either way, I bet there is significant sandbagging in that 2022 number. Is there actually 12-15% sandbagging…I don’t know. Maybe? Certainly it’s not going to be an easy year to forecast given that they are planning to roll out the new interface that truly combined livongo’s product with Teladoc for the first time, which should be a boost. Maybe they were just being extra conservative.

After the earnings call ended, I had all but decided I would probably at least trim my Teladoc postiion. But the long term opportunity still feels huge to me, so I’m still torn. They will be having an investor day November 18th, so we should learn a lot more about their 2022 expectations then, and I’ll likely hold off on doing anything too much with TDOC over the next few weeks. It is my one position that has some losses, so I may have some tax considerations with Teladoc shares as we approach year end as well.

Cumulative Gains by Company

And here is the table I’ve been using the past few months, showing my primary purchase of each holding, with the gains in the common stock so far. Several of these I’ve added to over time, either bringing my average cost basis higher, or in cases like TDOC, lower.

			     Purchase	PurchPrice Oct 31st
MongoDB (MDB)	 up  808.3%  7/16/2018	 57.39 	   521.29 
Magnite (MGNI)	 up  148.0% 11/10/2020	 10.90 	    27.03 
Upstart (UPST)	 up   97.4%  8/11/2021	163.18 	   322.04 
Nutanix (NTNX)	 up  159.1%  3/16/2020	 13.24 	    34.31 
Trade Desk (TTD) up  557.1%   1/2/2019	 11.40 	    74.91 
Docusign (DOCU)	 up  522.2%   8/7/2019	 44.73 	   278.29 
Teladoc (TDOC)  down -19.8%  3/17/2021	186.45 	   149.59 
Smartsheet (SMAR)up   29.4% 11/11/2020	 53.35 	    69.01 
Applovin (APP)	 up   22.4%  10/7/2021	 80.30 	    98.25 

Well that’s it. Now we get into the heart of another earnings season. Magnite this week on Wednesday, and then Trade Desk, Upstart and Applovin three days in a row M-W next week. I expect really good things from my companies this quarter, especially in relation to expectations, so it’s always fun to see where I’m right and learn from where I was wrong.

Thanks as always for the great discussion!