mekong22 portfolio October 2020

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 :wink:

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? :slight_smile:

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…



Hi Mekong,

Thank you for the post!

I wanted to jump in and give my two cents on TTD/NFLX.(I held TTD early in the year and sold last month as detailed on this board.)

IMHO, I don’t think NFLX is going to have an ad-tier anytime soon. They have pricing power (as they recently just showed with a small increase in monthly fee for a couple of their tiers.) A dollar or two here and there is not going to matter for the vast majority of Netflix subs, and over time NFLX appears on its way to becoming a sustained FCF generating machine.

Now, Hastings (or Sarantos) could change his mind of course. Hastings knows better than anyone what makes NFLX standout, and changes to that formula would be a BIG shift. (Wild guess here but I suspect that Green’s stance comes his board member David Wells, former CFO of NFLX, whispering in his ear.)

Having said that there’s no question that TTD has the potential to grow much more percentage wise from here!

I’m curious to see TTD’s upcoming quarterly - depending on what they show I may consider re-entering, although the bar I set is high. (~35-40 P/S means they are competing with very high confidence positions for me for investment dollars)


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Hi Purplemist

Thanks for sharing your thoughts. I agree with you, assuming we have a similar definition of “soon”.

I didn’t mean to imply that I think Netflix will have an ad-supported tier in the next year or two (I don’t). I’m more thinking sometime 3-5 years into the future, it could be a possibility. With more and more streaming services competing for our dollars, I feel the landscape will keep changing, and if they think they can switch some existing users over to a version of the service that brings in significantly higher margins (not to mention maybe enticing some incremental new users too), they might offer it. And The Trade Desk will likely be a major beneficiary if they do.

But regardless, I think TTD will do really great, even if NFLX never goes down that road. I’m excited to see how things play out.


I have made some reallocations during the first 11 days of November, including a couple new positions, so here’s a quick update if it’s of interest to anyone

As of this moment, middle of the trading day Nov 11th, my portfolio is up from +50.1% YTD at October 31st, to +57.2% today. It’s up primarily due to the gains on TTD after they announced earnings last week, partially offset by declines in AYX and DDOG whose earnings were not perceived as well by the market.

      10/31/2020  11/11/2020  November activity:
TTD     16.9%	    18.4%      Stock up on earnings, net of sales&buys
NTNX 	15.2%	    16.7%      Stock up a little, new purchases
MDB	13.3%	    13.5%		
AYX	13.9%	    10.8%      Stock down on earnings, and some sales&buys
DDOG	15.0%	     8.7%      Stock down on earnings, and some sales
GH 	 6.7%	     6.2%      Small sales
MGNI	  -   	     6.1%      NEW HOLDING
DOCU	 5.5%	     5.9%      Small buys
CRWD	 3.9%	     4.1%		
SMAR	  -   	     3.6%      NEW HOLDING
AMZN	 3.6%	     3.5%		
ESTC	 1.7%	     1.7%		
TDOC	 3.8%	     0.5%      Sale of most shares
KMI	 0.4%	     0.4%		

Last week TTD went way up on earnings, while AYX was down the same day. I had some TTD Jan’21 calls in a tax free IRA that were worth several times what I originally paid for them, and they were worth about 7% of my whole portfolio on Friday. Because I wasn’t anticipating any new news that would drive the price up further before expiration, and there were no tax consequences, I sold those on Friday, by luck, not too far from TTD’s peak. I was comfortable with my Trade Desk position getting larger, so I was planning to just redeploy those funds back into regular TTD shares but guessed that it might pull back a little the following week, so I held most of it in cash over the weekend.

I also sold a small amount of my AYX on Friday, and a few GH Jan’21 calls after GH’s price stayed about flat after earnings last week (same reasoning as TTD, no additional earnings or other news likely before expiration).

After researching Magnite (MGNI) over the weekend (I posted a summary on this board on Monday), I decided to instead put about 2% of the cash into a new MGNI position.

I also have been keeping my eye on Smartsheets (SMAR) since selling out of it at the beginning of 2020, and decided I like the valuation and their recent revenue trends, and I believe they’re undervalued based on what I think will be pretty conservative forecast expectations for them, so I reopened a small SMAR position on Monday too.

After continuing to think about MGNI some more, and seeing it’s price drop yesterday, as well as getting some additional thoughts from others on the board, I decided to buy some more Magnite yesterday.

While I like TDOC and think an investment in them will do quite well from here, I concluded that I have more conviction in other companies and decided to all of my Teladoc shares, keeping only a few LEAP calls that I had.

While I initially thought DDOG’s report yesterday wasn’t too bad, after listening to the conference call, and as I looked over my three year expectations for them last night, I decided my own projections for Datadog are too aggressive compared to how things are likely trending, and I sold off about 35% of my shares this morning. I think the valuation today is about right for them, compared to how I think they will do, not a bad stock to own, but no longer one that I think should be one of my biggest positions, given the valuation and my future revenue expectations.

This morning, I redeployed most all of the cash that was raised from the TTD, TDOC, and DDOG (and just a little from AYX and GH) sales over the past few days. I bought a little more MGNI and a little more SMAR. I also bought back some of the AYX shares I had sold friday (I’m more optimistic on Alteryx after digesting their report for a few days) and added some more TTD. I bought some more NTNX (gasp!). And I added a little more DOCU.

So now I’m up from 12, to 14, different companies (although AMZN doesn’t really count since I’m just just going to wait until the new year to sell, for tax reasons) and TDOC and KMI are pretty insignificant, so it’s really more like 9 actual holdings. If DDOG rebounds a bit, I may be tempted to sell off a little more (tho if it drops significantly, I also wouldn’t rule out buying some DDOG back).

In addition to the Tom G post on the premium TTD board (post 1895) that I recommended in my Magnite writeup thread, Tom G also has a great post of his summary of Magnite earnings on the premium MGNI board (post 76) that I highly suggest as required reading, both to anyone interested in MGNI or TTD. Incredibly, the post on the MGNI board only has 14 rec’s 36 hours later, which reinforces to me that this company is being underfollowed and likely depressing the valuation and stock price (for now).

If you don’t have a paid TMF subscription, get one if you are able, because posts like these alone are worth every penny!

That’s it for now. Thanks, especially to everyone that posted or emailed me about Magnite this week, the groupthink of this board is really amazing!



Hi Mekong22

Looks like your faith in Nutanix is being repaid.…

Accompanying slides…

If you look at slide 21, you will see the monumental change in the business model that I still think to this day we all under appreciated…

For example:-
hardware pass through billings went from $257m for 2018 FY to $0.7m for latest quarter.
non portable software billings went from $544m in 2018 FY to $20m in the latest quarter.

In the meantime their subscription revenues and billings grew well, their ACV billings and run rate built quarter by quarter and their customer growth remains excellent, their growth in cross selling multiple products is progressing and their record of launch and growth in new products remains excellent.

If Jeff Green had been leading Nutanix I don’t think it would be as maligned and would be worth 10x their current $5bn market cap.