This month, my portfolio behaved similarly to the others that have already posted their results.
It took off like a rocket at the beginning of October, when Alteryx increased their guidance, but then eventually settled down to slightly below where September ended. After posting my September summary, AYX was actually the stock that I received the most emails from board members about. I may have brought that out by being a little colorful with my language last month saying I was “salivating” over the new AYX 2023 Leaps, but I certainly wasn’t expecting it to work out so quickly, with a jump so dramatic so soon. Nice to hear that a couple of them were able to get in too before the announcement and big move. Granted, AYX has now come down to $125, even after pre announcing strong growth for this quarter. If it comes down a little bit more early next week, I might be tempted to add even more myself.
My monthly results:
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% End of Sep +50.9% End of Oct +50.1%
Early in the month, my portfolio kept hitting new all time high’s, at one point up more than +80% YTD. Although it has come down the past couple of weeks, there has been no negative news on any of my stocks whatsoever, so those ebbs and flows just come with the territory.
My portfolio allocations at the end of October and comparison to the prior month:
9/30/2020 10/31/2020 TTD 15.2% 16.9% NTNX 13.4% 15.2% DDOG 17.5% 15.0% AYX 12.2% 13.9% MDB 13.5% 13.3% GH 7.1% 6.7% DOCU 5.5% 5.5% CRWD 4.6% 3.9% TDOC 4.3% 3.8% AMZN 4.3% 3.6% ESTC 1.9% 1.7% KMI 0.4% 0.4%
I really didn’t make any trades this month, so the allocation changes above were essentially all due to stock price movements. I only sold off another very small sliver of AMZN and added it to my DOCU. I still plan to sell the rest of my AMZN before year end, which will mostly go to my 2020 tax bill. I was hoping for a nice pop in Amazon last week after their earnings release. Although the results looked as good, if not better, than expected, the stock moved down along with everything else, so I’ll hold off at least a few more weeks and see what happens.
The short version of my portfolio’s performance this month is that TTD, NTNX, and AYX all went up a bit, while DDOG, CRWD, and TDOC all went down a bit, while most of the others stayed about where they were.
Just a few quick words about the companies this month:
The Trade Desk – I just keep getting more and more excited about the prospects of TTD. Although I’m sure there was a lot of election spending already baked into expectations for TTD’s Q4, living in a “swing state” for the first time in my life this year, it’s really mind blowing how many political ads I’m seeing. And hearing some guesstimates about how much money is being poured in late by certain rich folks makes me have to believe that this quarter is going to be just as strong as advertised, pun intended
Others probably won’t agree, but I actually think that Netflix’s weak quarter is a great sign of things to come for TTD. I know that when Trade Desk’s CEO Jeff Green talks about how Netflix will someday have a free, or reduced price, ad-supported subscription, it often gets poo-poo’d as gratuitous overly optimistic talk, but I wouldn’t be so sure. Hulu has always said that they make a lot more money from their lower cost subscribers that have to watch the advertisements than they do from subscribers that pay twice as much to go ad-free.
This article from last year, essentially says that Hulu’s $6/month “with-ads” subscribers ultimately generate $15/month including the related advertising revenue, 25% more than subscribers that pay $12/month to be ad-free. I bet the difference is even greater today.
Despite it’s high valuation and big stock price runup recently, not to mention already being my largest investment, TTD is another one I’m tempted to put more money into if it continues to slide this week.
Nutanix – I’ve documented my reasons for owning NTNX in previous posts and nothing new to report here
Datadog – I’m very curious to see DDOG report in two weeks. I would bet that the likelihood of an upside pop after earnings release is a lot higher than downward, if the stock stays where it is today when they announce. But this year, anything’s possible.
Alteryx – The stock went from $113 to $152, practically overnight at the beginning of October when they announced the increased guidance (after the quarter had already ended!) and now it’s fallen all the way back to $125. If they beat the revised guidance even slightly, which I bet they do, I’ve got to think this stock pops again at the end of next week, with the caveat of any macro issues that may linger unresolved…was that a good way to phrase it without sounding political?
MongoDB – Great company, performed surprisingly well through the pandemic so far. Similar to the competitive action with TTD and NFLX above, SAP announced a really disappointing quarter this month and its stock has dropped about -40%. Sure, that could be a sign of less spending in the database market overall (so possibly a negative for MDB), but I have to believe that SAP’s loss will be MDB’s gain, and I think SAP’s weakness is a good sign for MDB as companies move more and more from SQL to NoSQL/non-relational.
Guardant Health – GH’s industry/market had some interesting news. We know that Grail, recently acquired by Illumina (ILMN) for $8 billion, will be one of Guardant’s primary competitors in the early detection liquid biopsy space. And now, Exact Sciences (EXAS) has bought a privately held liquid biopsy startup called Thrive Earlier Detection for $2 billion.
ILMN is actually taking some heat for potentially overpaying for Grail
I thought the Exact Sciences deal might be bad news for GH, given that another competitor is emerging, but GH’s stock price actually went up about +10% on the day their deal was announced, perhaps as a sign of overall optimism for the future industry. It’s looking more and more certain that there will someday be huge profits in this space in coming years, but also, no doubt, it is going to be extremely competitive, and while I think one, or both, of GH and Grail are the likely to be ultimate winners, it is way too early to tell. GH’s adept navigation of the FDA approval process twice this year, and their existing relationships with so many customers via their earlier products, gives me optimism, although I’m sure ILMN and EXAS likely have many of these proficiencies as well. High risk, high reward.
Docusign, Crowdstrike, Teledoc – These get a lot of coverage on this board already and there hasn’t been much new news, so nothing really for me to add there this month
And not much worth nothing on my smallest holdings right now either.
I’d say, today, if I had new money, I would most likely be adding to TTD, DOCU, and just slightly further behind, AYX, then maybe MDB.
Here comes earnings season!…TTD, AYX, GH and DDOG over the next two weeks, followed by NTNX later this month, and then MDB and DOCU at the beginning of December. It’s definitely going to be an interesting next few weeks.
I hope you all continue to stay safe. Until next month…