MY PORTFOLIO AT THE END OF FEB 2022
Here’s the summary of my portfolio at the end of February 2022. As usual, for my own convenience, I calculate it at the last weekend of the month. Monday will carry over into March.
February seemed to be a “Bottom-Forming” month.
Step One: My portfolio had bottomed at 67.5% on Jan 27th (down 32.5%) after a rather indiscrimminate sell-off of companies that are doing well, especially rapidly growing software companies, and a movement into junk, “value,” low-growth, old-economy, companies.
Step Two: The portfolio then hit a high of 87.8% ten days ago on Feb 15th. While that may not sound like much, it had risen 30% in just over two weeks (87.8/67.5 = 1.30 which is a 30% rise), and let me tell you, being down 12.2% is a lot different than being down 32.5%.
Step Three: My portfolio then descended in a week to 66.5%, making a second bottom, or double bottom, on Wednesday of this week. It was rather peculiar how it made the descent: Every time one of our companies reported earnings, usually earnings that in good times would have been considered rather spectacular, the talking heads would find some metric that they didn’t like (there’s always a metric that you can dislike no matter how good the report), so instead of rising 10% after earnings, the stock would collapse and fall 25% or 30% in the aftermarket, in spite of already being way, way, down from their highs, and our other stocks would fall 2%, 3%, or 4% in sympathy. It has been bizarre but it gave me gorgeous opportunities to buy at bargain prices (which buys I usually announced at the time to help people feel comfortable doing the same if they wanted to).
To confirm that it was another bottom, the trolls showed up right at the bottom saying “You should sell, sell, sell!” (with four consecutive posts by the same person, just like at the last bottom). It’s odd that these people never show up saying “sell” at the top, always at the bottom.
Step Four: The very next day, Thursday, my portfolio bounced over 11% again to 74.1%, and today, Friday, even after Zscaler got the same treatment, and fell $42 in a day after reporting its highest growth in three years, my portfolio is at 73.4%. It may not sound like much progress off-hand, but from 66.5% I needed a 50% rise to get back to starting (100%), and now I just need a 35% rise. Not bad for two days’ progress.
Beware: Neither you nor I can be sure that this was a real double bottom and the bottom of this ridiculousness, even though it certainly looks like it. But rest assured, it will end. We just can’t be sure if it has already happened or whether it will be another month or two months, or whatever, but it will happen.
We seem to have one or two of these sell-offs every year, but this has been the worst I can remember since The Great Recession of 2008. That was a real economic recession, not just a stock sell-off (the stock sell-off was much worse than the present one, and for good reason). Unemployment hit 10%, GDP dropped by 4.3%, which was the worst decine in over 60 years, banks were actually going bankrupt, and it felt like we could be heading into a real depression. It wasn’t called The Great Recession for nothing!
Let’s compare with the present. Our economy is booming! Our GDP increased an astounding 6.9% last quarter (one of the best in 40 years), and GDP was up 5.3% for the year. Companies aren’t laying off workers, the big complaint is that they can’t find enough to hire. The current unemployment rate is 3.9%, and is about as low as it goes. And interest rates are at record lows. And the Fed says that they will raise interest rates three or four times this year. Whoopdee doo! Interest rates will still be at near record lows! This isn’t the end of the world. It’s just a sector rotation and retreat from our rather preposterous highs.
Every time one of these sector rotations happens, all the people who have been jealously looking at our results, and envying us, come out of the woodwork and start telling us that we should sell out and that our “overvalued” stocks will never bounce back.
And then we have Russia invading the Ukraine, and the West applying sanctions. Since we know that Russian hackers were responsible for most of the large breaches that have hit the news, this has to apply an even larger tailwind for our cybersecurity companies.
Staying invested has been a winning plan for me. It’s enough work to find and choose great companies without also having to guess getting out and getting back in, trying to time the market. (You have to be right on both decisions!) You have to learn to live with these ups and downs. Trying to guess what the market is going to do is crazy-making, no matter what the market timers tell you.
For further discussion of what happened in my portfolio during the month, and how I handled all this, see “February” in the section below called “LAST THREE MONTHS REVIEW”.
ABOUT OUR COMPANIES
First of all, the economy is booming,
Secondly, cloud companies have a huge secular tailwind for years to come, because companies everywhere are moving to the cloud. Then the cybersecurity companies have another tailwind with the likelihood that Russia will attempt more breaches into our companies, governments, and infrastructure.
Thirdly on top of that our companies don’t only feed off that tailwind, but they are SaaS companies, which means that:
They are growing revenue regularly at rates never seen before in my memory,
They have very high gross margins.
They are leasing software which is embedded in their customers’ businesses.
They have dollar-based net retention rates over 120%.
They are very capital light, (which means that they can grow revenue at 50% to 100% yearly with little or no capital expense. No factories to build, equip and staff.)
Almost none of them have any debt, rather they tend to have large amounts of cash on hand.
And their software either saves money for their customers or increases their profits, which in essence means that even in an economic downturn, when other companies can see a big drop in revenue, it’s very unlikely (to almost impossible), for our companies to see an actual drop in revenue (maybe a drop in revenue growth rate, but no drop in revenue).
Again, in other words, our companies are not going to “fall to zero” as some idiot troll wrote on the board, but they have huge tailwinds due to both their crowd sector and due to their business design. This sector rotation will stop and reverse. I can’t promise it for tomorrow or next week, but it will happen.
MY RESULTS MONTH BY MONTH FOR 2022
My portfolio closed this month down 26.6% (at 73.4% of where it started the year)! Here’s a table of the monthly year-to-date progress of my portfolio for 2022.
**End of Jan -28.9%**
**End of Feb -26.6%**
FIVE YEAR AND TWO MONTH RESULTS
You will hear an incessant chatter from know-nothings telling you that no one can beat the averages and that stock picking doesn’t work, and that books have been written to prove it, and that we will all return to the mean, so I thought that I’d give you some facts about it.
Guess what folks! The books are wrong. Here are my last five years of results compounded, which you can compare against the S&P. Remember that I’m not just picking my results off the wall. I posted my positions and their sizes every month of those five years so any one who wanted to check me out could have done so. It’s real, and others on the board have done approximately the same, some a little better and some a little worse, but in the same range. It can be done, although I strongly doubt that we will ever have another year like 2020.
**2017: + 84.2%**
**2018: + 71.4%**
**2019 + 28.4%**
**2020 + 233.3%**
**2021 + 39.6%**
In five years, those numbers compounded to 1886% of what I started with. That’s not up 88% or even 188%! It’s about nineteen TIMES what I started with in January of 2017, in five years, which is really, really, crazy numbers, (and shows the power of compounding!)
During that time the S&P was up 112% in five years, even with 2021’s large gain (large for the S&P). That’s up 112% compared to up 1786%!!! You can add a few percent by adding in dividends, but that doesn’t change the comparison at all.
Now let’s add in the results this year, year to date. With Feb loss of 26.6%, the five year and two month results compound to 1384% of what I started with. That’s almost FOURTEEN TIMES what I started with five years and two months ago.
Adding in this month’s results (-8.0% ytd) the S&P was up 95% in five years and two months. That’s up 95% compared to up 1284%!!! You can add a few percent by adding in dividends, but that doesn’t change the picture at all.
Tell me again that active intelligent stock picking doesn’t work! The only ones who say that are the people who don’t know how to do it.
Read the Knowledgebase several times. And the other articles on the side panel. And the posts with lots of recs by people you trust, and you may learn how to do it too.
Remember that this was done with no leverage, no options, no margin, no penny stocks, no fancy stuff, just a concentrated portfolio of high growth companies.
I am no good at timing the market and I haven’t tried, but have just stuck with strong, rapidly growing, high-confidence companies. I can’t tell you what the market will do Monday, or next month, or the next three months, or six months, but I can tell you that these companies are very successful, and that I can sleep well with them in my portfolio.
HOW DID THE INDEXES DO?
Here are the results year to date:
The S&P 500 (Large Cap)
Closed down 8.0% YTD. (It started the year at 4766 and is now at 4385).
The Russell 2000 (Small and Mid Cap)
Closed down 9.1% YTD. (It started the year at 2245 and is now at 2041).
The IJS ETF (The S&P 600 of Small Cap Value stocks)
Closed down 2.5% YTD. (It started the year at 104.5 and is now at 101.8)
The Dow (Very Large Cap)
Closed down 6.3% YTD. (It started the year at 36338 and is now at 34058).
The Nasdaq (Tech)
Closed down 12.5% (It started the year at 15645 and is now at 13695
These five indexes averaged down 7.7% ytd.
EARNINGS SEASON
Snowflake, Zoom, Crowdstrike and SentinelOne are still due to report, all by the 15th of March.
LAST THREE MONTHS REVIEW
December. Since my November report we had earnings from Zscaler, Snowflake, SentinelOne, and Crowdstrike. Zscaler had great results. Snowflake and Sentinel just blew it away. Crowdstrike had good “solid” results, but their revenue growth rate fell from 70% to 63% sequentially, and from 83% to 63% yoy in spite of all the tailwinds of breaches all over the place, while Sentinel was growing revenue at 127%, just over exactly twice as fast
You mean I was unhappy with 63% growth??? Well Zscaler, Sentinel, and Cloudflare, all of whom also have their oars in cybersecurity, were all accelerating revenue growth (Cloudflare only accelerating a tiny bit, I’ll admit), but Crowd’s growth rate dropped from 70% to 63% sequentially, and from 83% to 63% yoy, and it has been steadily descending.
I had continued to trim my Upstart position between $220 and $165, but when it got to $140 and below, I decided that this was getting silly, the price was just 35% of its high of a month or two before, and all the news (what there was of it) was good, and I held on to what had gotten down to a 7% position.
To get money to buy my Sentinel position, and build my Snowflake after results, I sold out of my new Amplitude position, which I had been trying to build up, and heavily trimmed Crowdstrike. I have also lightly trimmed DataDog whenever it got over 20% of my portfolio, as I said I would do. I added a tiny bit to Monday, even though it was over a 16% position at the time, because I just can’t resist. ZoomInfo has been a star of my portfolio, down much less off its recent highs in this sell-off than most of my other companies, and has moved up to 3rd place in my portfolio.
Why did I choose to sell out of Amplitude when I needed cash? Well, I felt Amplitude was my least sure company as far as results going forward. They guided so weakly, that we had to hope that they were HUGELY sandbagging, but what if they weren’t? I didn’t have to hope for the results of Snowflake and SentinelOne, where I was putting the money. Simple as that!
But then later in December, I used some money that I was trimming from others (Datadog because it was over 20% of my portfolio, and even some of my favorites like Monday and ZoomInfo, etc), to buy back a position in Amplitude. I’m not always consistent.
January continued the sell-off of the most successful companies in the market. My portfolio was relatively quiet. I continued to taper my smallest position (in Crowdstrike), and then finally sold out of it , and I sold out of my smallish position in Upstart, and a week later bought back a little position. I wrote up these decisions on the board so I won’t elaborate further.
February brought some MAJOR changes.. I took a new position in Bill after it announced earnings, and decided that I wanted a full position. I built it up into a 13% position, which has grown by itself to a 16% position in 2nd place (behind Datadog), as other stock prices were falling and it wasn’t.
I also built my Cloudflare position from an 8.6% position at the end of Jan, to a 12.5% position now. Granted, that’s my smallest position, but it’s a lot bigger than it was. I added lots to Monday in the mid $130’s when it sold off irrationally after earnings (it’s already up $20 in less than a week from those purchases), and added to Zscaler, most at $213.20 when it did the same. I also added little bits to Sentinel and Snowflake when I had a chance, and trimmed some bits from DataDog when it got too much over 20% of my portfolio. (Don’t worry, it’s still at 20.9% in spite of the trims).
Where did I get the money for all those purchases? Well I sold out of my little Upstart position and never looked back. I felt a sense of relief. I know it will probably do quite well, but I just couldn’t take the total uncertainty each quarter, and simply not knowing what the f— was going on in a complicated, complicated, business. It’s just me. I had companies that I could be much more confident in. I also sold probably half of my little Amplitude position before earnings, for money to pay for Bill, and sold the rest after earnings. It’s gone. As I said for Upstart, it may do very well, but I had companies that I could be much more confident in. And finally, I sold out of ZoomInfo after earnings to build up my Bill and add to Monday, Zscaler, Cloudflare, Sentinel, and Snowflake. No special reason to sell ZoomInfo except that in times of trouble I like to be in my highest confidence positions, and in a smaller number of them. It’s another that may do just fine, but… well you know the song.
Please remember that I could change my mind about any one or more of my positions tomorrow, depending on new information or other factors, and I may not do another update until the end of next month. Make your own decisions. Don’t just follow mine. I make mistakes at times! Guaranteed!
HOW THE INDIVIDUAL STOCKS HAVE DONE YTD
Here’s how my current positions have done so far in 2022. I’ve arranged them in order of percentage gain. As always, I’ve used the start of the year price for stocks I’ve been in all year, and my initial buy price for stocks I’ve added during the year. I tend to keep buying as the price rises, so my average price is almost always higher than my starting price.
Please remember that these starting prices are from the beginning of 2022, and not from when I originally bought them if I bought them in earlier years. (For instance, I bought Cloudflare in July of 2020 at $34.97, but it’s listed below as starting at $131.50, because that was its price at the start of this year)
**Bill from 226.25 to 229.36 up 1.4% New in Feb**
**DataDog from 178.11 to 161.41 down 9.4%**
**Cloudflare from 131.50 to 109.27 down 16.9%**
**Snowflake from 338.75 to 269.42 down 20.5%**
**Sentinel from 50.49 to 38.82 down 23.1%**
**Zscaler from 321.33 to 221.85 down 31.0%**
**Monday from 308.72 to 155.24 down 49.7%**
All in all, that’s not a pretty picture, but as you can see, Zscaler and Monday are pulling the portfolio down, having sold off in spite of excellent results.
A BRIEF THOUGHT ABOUT THE VALUATION OF MY COMPANIES
The companies currently in my portfolio are growing their revenue at rates from about 50% to well over 100%. (That was Cloudflare at the low end and Snowflake was up 110% and Sentinel more than that). Let’s be conservative and say they averaged about 75% to 80% revenue growth. I’m not giving an exact calculation as this is just illustrative.
My portfolio grew at “only” 40% in 2021 with some shrinkage of valuation, and if it compounds another 32% in 2022, let me tell you that I’ll be very happy with that. Remember that I averaged “just” 32% growth for all those years, and I remember also how 32% compounded insanely!
POSITION SIZES
I now have seven positions which is a small but still comfortable number for me. Here they are in order of position size, and bunched by size groups.
**.**
**Datadog 20.9%**
**Bill 16.0%**
**Snowflake 15.0%**
**Monday 14.6%**
**Sentinel 13.2%**
**Zscaler 12.6%**
**Cloudflare 12.5%**
Those among you with curiosity will have discovered that the total adds up to 104.8%. I explained previously that I had about 2% in “margin.” Well, after bringing myself back to that 2% using some cash from my sales of Amplitude, Upstart and ZoomInfo, I again put cash that didn’t belong in my investment category back in to take advantage of Monday and Zscaler being at fire-sale prices.
I’ll give you a little capsule of the positions before moving on to the extensive company reviews:
DataDog is in first place and a 20.9% position, and is high confidence. In fact it’s been in first place for quite a while. It’s dominant in its field and seems to have little if any effective competition left. I trim a little when it goes over 20% of my portfolio because my experience with large positions well over 20% has been terrible. I will trim as necessary to keep it mostly under 21%.
Bill is a new position at 16.0%. It had enormous results which overcame my initial hesitation, so I decided to jump in even though the price had significantly risen.
Snowflake. I took my current position in November and December, and added to it in Jan and Feb. It’s now a 15.0% position in 3rd place. It had great results and it’s high confidence. It’s still highly valued, though not nearly as much as a year ago.
Monday is a 14.6% position in 4th place. It fell a large percent from its high during the pullback, apparently due to lock-up expiration coinciding with the sell-off. It then announced excellent results in February but sold off mightily again over a metric or two that apparently didn’t suit the people who operate the trading bots. Extensively discussed on the board. I added a lot this week when it sold off, and by Friday it was up $20 in two days from my buys. And I didn’t get the bottom price by a long shot.
SentinelOne is a new position that I took in December after it announced its extraordinary Oct quarter results. It’s in 5th place at 13.2%. It’s a smallish security company growing at enormous rates. Those were 128% yoy and 22.3% sequentially. And the 128% rate of growth was accelerated from 96% growth a year ago and from 121% in the July quarter. They announce Jan quarter results in March.
Zscaler is the big daddy of the Zero Trust cloud-native security companies. It grew at 63% this quarter (announced this week), its highest rate of growth in years, so it sold off of course. I added to my position.
Cloudflare had been weak, falling more than 60% from its all time high with no bad news except its high valuation (which was really very high). It’s in 7th place, now with a 12.5% position. It keeps bouncing along at a very consistent 50% to 53% yoy revenue growth, and churns out new products like mad. I suspect it may start accelerating that growth.
COMPANY REVIEWS
Please note that when I discuss company results, I almost always use the adjusted values that the companies give. I’m going to discuss them in mostly alphabetical order.
Bill.com (BILL) is a leading provider of cloud-based software that simplifies, digitizes, and automates complex back-office financial operations for small and midsize businesses (SMBs). It also has begun collecting transaction fees on helping the customer companies pay and collect bills. It has made two small acquisitions which have jet propelled it. I was afraid of it at first because it sounded like a complicated story, and tied to the economy, but their last quarter results were so incredible that I cast doubts aside. Here’s enough to get you interested
Results of Dec quarter
EPS of zero cents beats by 18 cents
Revenue of $156 million beats by $25 million
Total Revenue of 156.5 million, up 190% yoy
Core Revenue of $155.5 million up 197% yoy (Consists of Subscription and Transaction Revenues)
Organic Core Revenue was $97 million, up 85% yoy
Subscription fees were $49 million, up 85%.
Organic subscription fees were $40 million, up 51%.
Transaction fees were $106 million, up 313%.
Organic transaction fees were $57 million, up 121%.
Divvy spend management revenue was up 188% yoy
There’s plenty more of course but that should get you interested and enable you to see why I built up my position so fast
**Cloudflare (NET)**had been a star of my portfolio, almost sextupling, at one point, since I first bought it in 2020. I had been saying that I didn’t understand why it was going up like that. It’s growing revenue steadily at 50% or so, which is certainly a great rate of revenue growth, but it is slower growth than my other positions.
So what was pushing the price up? I suspect that there were two issues.
First was that they were putting out new products and enhancements to older products at a rate that has rarely been seen before, and the thesis is that this will enable high growth to continue for many more years than currently expected.
The second issue was a perception that this company is on its way to both become a fourth cloud (along with AWS, Azure, and Google). 
. The people pushing the stock up, with what must have been massive buys, obviously believed it.
Well in December the price rise finally ended, in conjunction with the pull back in all the high growth software companies, and the stock price fell even considerably more than the rest of my portfolio (except Upstart). It remains a great company and I have no plans to exit it. It fell a lot more in January, down to an unbelievable $80. I bought considerable amounts, mostly in February, from $86 to $116 on the way back up. It finished at $109, which is up 36% from its $80 low close.
DataDog is in first place currently in my portfolio at 20.9%. They posted outstanding December quarter results.
Revenue growth was up 84% and accelerated from up 75% in the September quarter, and from up 67% in the June quarter, which in turn had accelerated from up 51% in the March quarter.
Operating cash flow was $116 million, up from $67 million sequentially, and up from $24 million a year ago.
Free cash flow was $107 million, up from $17 million a year ago.
NRR was over 130% for the 18th quarter in a row
They are doing just fine.
Announced FedRAMP Authorization at the moderate impact level.
Announced a global strategic partnership with AWS.
Announced the launch of Sensitive Data Scanner which provides their customers with an easy way to detect, classify and protect sensitive data found in their application logs.
Achieved the AWS Graviton Ready designation.
Achieved AWS Migration & Modernization Competency status for AWS Partners.
Announced integration with Confluent. Users running Confluent Cloud, can now use Datadog to monitor their Confluent Cloud resources alongside the rest of their technology stack.
Monday AGAIN had an excellent quarter. They help people work together and cooperate, and yes, I know that there are lots of other companies in that field, but none that I know of growing revenue at 91%. Monday is in 4th place, at 14.6%.
The number of enterprise customers over $50,000 was 793, up 200% from 264 a year ago. That’s not a misprint! … 793 up from 264 are the real numbers. I personally have never seen any company grow enterprise customers at 200% yoy! And it’s not a fluke, they’ve been growing those cusotomers at 200% or more for at least the last eight quarters.
NRR for customers with more than 10 employees was 135%, up from 130% in Sept, which in turn was up from 125% in June and 121% in March.
Adjusted gross margins topped 90%.
They seem to be rapidly moving towards profitabilty with Adj Operating Margins coming in at minus 10%, greatly improved from minus 47% a year ago.
On this glorious report they dropped from $195 to $128, a 34% drop at the bottom !? Can you believe it! As I said, I bought all I could at about $136 average. In two days it’s back up to $155.20
There’s lots more good stuff, but I’ll let you research the rest.
SentinelOne Well there have been so many posts on Sentinel that I won’t go into great detail, but merely say that they had an absolute blowout. I overcame my hesitation and now have a 13.2% position, in 5th place. Here are some of the numbers that made me change my mind:
Revenue was $56.0 million, up 128% from $24.6 million yoy
• Revenue growth progress for the last six quarters has been yoy growth of 96%, 103%, 97%, 108%, 121%, and now 128%, so accelerating every quarter except the previous Jan quarter
• Revenue growth sequentially was up 22.3%, from last quarter’s $45.8 million. That’s a run rate of up 124%.
• Annualized recurring revenue (ARR) was up 131% to $237 million from $103 million a year ago.
• Total customer count grew more than 75% yoy from 3350 to over 6,000 customers, adding 600 this quarter.
• Customers with ARR over $100K grew 140% year-over-year to 416 from 173 a year ago.
• Dollar-based net revenue retention rate hit a new high of 130%, up from 115% a year ago.
• Adj gross margin was 67%, up from 58% a year ago
• Adj operating margin was minus 69% of revenue, improved from minus 102% a year ago. Not only that but the last three quarters the Adj op margin has been -127%, -98%, and -69%. Clearly improving.
• Cash was $1.7 billion so they are clearly not going to run out of money
They had multiple significant announcements in Jan and Feb:
First, they increased their integration and partnership with AWS (Amazon Web Services).
Second, they announced that KPMG utilizes SentinelOne for cyber incident response services. “KPMG’s Cyber Response Services team, which has been involved in many of the most high-profile breaches worldwide, will use Sentinel’s Singularity XDR platform to accelerate investigations and response to cyberattacks”.
Thirdly, Barracuda Networks, who protects over 200,000 global customers, “selected Sentinel’s Singularity XDR platform to help MSPs prevent, detect, and autonomously respond to threats at machine speed with AI-powered XDR”.
Fourthly, they integrated with Mimecast to improve security for emails (as far as I can tell)
Fifthly, they integrated with Zscaler, simplifying XDR and Zero Trust adoption
Sixth, they launched DataSet, a “revolutionary” live enterprise data platform, which leverages cybersecurity data expertise to help enterprises ingest, store, and understand real time data at scale – beyond cybersecurity use cases
Snowflake. As with Sentinel just above, Snowflake also blew it away in their October results, and I built my position to a 15% position in 3rd place. Why? Here are some of the results:
Total revenue of $334 million, up 110%, and up 23% sequentially.
Product revenue of $312.5 million, up 110%
Adj Prod Rev Gross Margin was 75%
RPO of $1.8 billion, up 94% yoy
Total customers were 5,416
Customers over $1 million were 148, up 128% from 65, and up 28% sequentially from 116.
Net revenue retention rate of 173% !
Op Margin was 2.5%, hitting positive territory long before they had guided
Op Cash Flow was $15.5 million
Op Cash Flow Margin was 4.6%
Adj Free Cash Flow was $21.5 million or 6.4% of Revenue
Adj EPS was 4 cents, up from a loss of 28 cents a year ago
Continued international expansion resulted in product revenue from the EMEA and APJ regions up 174% and up 219% yoy.
Guidance for product revenue next quarter was up 96%, which probably means it will be over 100% again.
Conference Call – Just about every analyst said something like “amazing” or “fantastic” or “terrific” or “unbelievable results”.
In Jan they announced support for ITAR (Gov’t) Compliance on Microsoft Azure Government and on AWS GovCloud. I’m not sure what it means but it has to be good news.
They also announced that they maintained a perfect recommend score for the fifth consecutive year. 100% of Snowflake customer survey participants said they would recommend Snowflake to other organizations.
“It is best in class for virtually all product measures including scalability, usability, ease of installation, ease of administration, customization, and extensibility, and ease of upgrade/migration to new version. It maintains a perfect Recommend score,” said Howard Dresner, founder and CRO at Dresner Advisory Services.
Zscaleris in 6th place with a 12.6% position. As I wrote above, it is the big daddy of the Zero Trust cloud-native security companies.
It had excellent Jan quarter results, announced last week. It grew at 63% this quarter (announced this week), its highest rate of growth in years, so it sold off of course. I added to my position. There were lots of discussions on the board just a couple of days ago, so that’s enough from me
SOME THOUGHTS ABOUT THE GROWTH OF OUR BOARD
We started our current investing spurt in the beginning of 2017, about five years ago.
When you sign on to the board you’ll see in the middle of the screen a little icon that says “<< 7 days >>” click on it down to where it says “365 days”, and go back 5 years (5 clicks). Back then our board was a twentieth of the size it is now, at most. The first page I came to had a total of 45 recs on an entire page of 20 posts, or an average of a little over two recs per post. A post with 25 recs was unusual, 50 was uncommon, and 100 was really rare. We also had many fewer posts each day.
As an example, until just a few months ago we had NEVER, EVER, had a post with more recs than the high 300’s. Yet earlier this month I had a ordinary post, just a post about what I had done about a stock, that had over 660 recs. That is crazy!
Our success has flooded us with new posters and readers (that’s you, most likely), so you can see we have to limit our posts to meaningful ones to avoid flooding the board and destroying it. I may at times seem arbitrary in deleting posts but that’s why it’s necessary.
Thanks for your cooperation
FINISHING UP
Let me remind you first, that I have NO IDEA what our stocks will do next month. I’m terrible on predictions. But I know that the businesses of our companies will do just fine for the most part.
I feel that my portfolio is made up of a bunch of great companies. But that’s just my opinion, and I can’t say often enough that I’m not a techie and I don’t really understand what most of them actually do at all ! I just know what great results look like. I figure that if their customers clearly like them and keep buying their products in hugely increasing amounts, they must have something going for them and, as I’ve often said, I follow the money, the results. And I listen to smart people about the prospects of these companies.
When I take a regular position in a stock, it’s always with the idea of holding it indefinitely, or as long as circumstances
seem appropriate, and never with a price goal or with the idea of trying to make a few points and selling. I do, of course, eventually exit. Sometimes it’s after months, and sometimes after years, but I’m talking about what my intention is when I buy.
I do sometimes take a tiny position in a company to put it on my radar and get me to learn more about it. I’m not trying to trade it and make money on it, I’m just trying to decide if I want to keep it long term. If I do try out a stock in a small position and later decide that it’s not what I want, I sell it without hesitation, and I really don’t care whether I gain a dollar or lose one. I just sell out to put the money somewhere better. If I decide to keep it, I add to my position and build it into a regular position.
You should never try to just follow what I’m doing without making up your own mind about a stock. First of all, you may have a completely different financial picture than I have. Different income, different assets, different debts, different expenses, different financial and family responsibilities, etc.
Besides, in these monthly summaries I’m giving you a static picture of where I am currently, but I may change my mind about a position during the month. In fact, I not infrequently do, and I make changes in the position. I usually don’t announce these changes until the end of the month, and if I’m busy or have some personal emergency I might not announce them even then. And besides, I sometimes make mistakes, even big ones! Don’t just follow me blindly! I’m an old guy and won’t be around forever. The key is to learn how to do this for yourself.
THE KNOWLEDGEBASE
Since I began in 1989, my entire portfolio has grown enormously. If you are new to the board and want to find out how I did it, and how you can try to do it yourself, I’d suggest you read the Knowledgebase, which is a compilation of my “words of wisdom”, and definitely worth reading (a couple of times) if you haven’t yet.
A link to the Knowledgebase is at the top of the Announcements panel that is on the right side of every page on this board.
For some additions to the Knowledgebase, bringing it up to date, I’d advise reading several other posts linked to on the panel, especially:
How I Pick a Company to Invest In,
Why My Investing Criteria Have Changed,
Why It Really is Different.
Illogical Investing Fallacies
I hope this has been helpful.
Saul