Current Holdings - each is @25% of this section of my port.
FOUR
Bought: 12/13/21
Rationale: Hochfeld’s extensive post on SA: seekingalpha.com/article/4473390-shift4-company-is-coming-of…
Total return to date: 6.3%
Regret:: None yet. (See below).
Plan: Hold for as long as the growth and price possibilities stay intact.
ZS
Rationale: Besides the metrics I know something about the company’s product and how critical it is for most businesses in this WFH, legacy software-ridden environment. My first investment was before my awareness of this board. Their great growth is now expected and no longer a surprise, as evidenced by their latest report - only a 16.5% EPS surprise and an 8% revenue surprise. That said, QoQ growth of 12.5% and YOY sales of 62% is still “nothing to sneeze at”. I’ve traded in and out of ZS a few times, the most recently in early December avoiding the worst of the tech stock Crazy Eddie sale event. Currently 25% of my hypergrowth allocation.
Total return to date: 38%.
Regret: missing the run from q320 to mid-21. My original position would be up 626% now (not a typo) and I’d be a year closer to retirement on ZS by itself.
Plan: Hold through next earnings report and evaluate price pattern and metrics vs other hypergrowth candidates.
DDOG
Rationale: Besides the metrics I know something about the company’s product and how it improves IT infrastructure operational monitoring. Most recent earnings report was very strong: top 6% (of 925 reports I tracked) in combination of revenue and earnings surprise. Thought I was done with this stock, but because the company is still growing that strongly it’s currently 23% of my hypergrowth allocation.
Total return to date: 1.7%. that’s not a typo either.
Regret:: Getting spooked by volatility and not making money on a stock that’s doubled since my original investment 16 months ago. This is called “missing the boat”; after dropping in Q2’s volatility, DDOG DDoubled in 6 months from May to November.
Plan: Hold through next earnings report and evaluate price pattern and metrics vs other hypergrowth candidates.
SNOW
Bought: 11/19/21
Rationale: Blowout quarterly report (top 3% earnings and sales surprise), and a candidate on this board. My new financial ratings company has a significant investment in the software platform.
Total return to date: -8.5%
Regret:: Not buying Snowflake a long time ago.
Plan: Hold through next earnings report and evaluate price pattern and metrics vs other hypergrowth candidates.
Waiting
AMPL: Limited myself out in December’s hypergrowth bear. Need to review, waiting for a solid bottom to form
UPST: Have been in and out 3 times this year for a decent return of > 100% total. Waiting period of 30 days from my last loss sale has expired, now waiting for a solid bottom to form, which it just has as Saul mentioned. Planning to get back in soon.
APPROACH
As I am nearing an early retirement, I limit my allocation to the hypergrowth strategy to about 10% of the portfolio, given these stocks’ volatility and herd-driven pricing. In hindsight, Oops.
Making the decision to read this board’s leaders made a huge difference to my performance in 2020 and for that I will always be grateful.