My portfolio at the end of the year (2015)

My portfolio at the end of the year (2015)

I finished the year up 16.0% with the S&P down 0.7% and the Russell 2000 Small Cap Index down 5.7%

I currently have fifteen positions total. SWKS, SKX and INBK are still my three largest positions, in the same order. Their PE’s are, respectively, 14.57, 19.37, and 16.03, which is quite respectable and gives them an average PE of roughly16.7, which is rather remarkable for stocks growing earnings at an average rate of 84.7%.

These big three make up about 48% of my total portfolio. Although these are fairly high-conviction stocks, that’s a real lot in three stocks. They are in completely different fields: microchips, banking, and retail clothing. This wasn’t by design, but it spreads the risk.

Now we come to my middle size positions, a group of seven stocks which descend in size from about 8.5% of my portfolio down to about 4.8%. These include LGIH, SEDG, CASY, INFN, SNCR, AMZN, and CBM. Together, the seven of them make up about 47% of my portfolio, and combined with my large positions make up 95%.

If I exclude Amazon as a special case (which you can consider as you like), the other six have an average PE of 21.5 and an average rate of growth of annual earnings of 92.7% (also excluding Amazon).

SEDG has big earnings in the trailing 12 months, with a loss in the 12 months before that, so I capped its rate of growth of earnings at 150% for the purpose of this calculation. (If for some reason you decided not to count it, the rest still have a rate of growth of 81.2%, so the difference is academic).

I’m well aware that these companies probably won’t continue to grow earnings at that same extrordinary rate of growth for the next 12 months, but you’ll have to decide for yourselves if you think a PE of 21.5 and an historic rate of growth of annual earnings over 90% is risky.

Then I have three small positions, ranging from 3% to 2% of my portfolio. These are CYBR, CELG, and AMBA. Combined they make up about 7% of my portfolio.

Finally I have two tiny positions, AMAVF at about 0.9%, and FB at 0.2%. These are really tiny in the context of my usual position size. You don’t have to tell me that these positions don’t fit into the guidelines I’ve preached. I know. That’s why they are so very tiny.

This all adds up to over 100% as I have about 3% on margin.

What I do is “modified buy-and-hold”. Of my biggest three positions I’ve had SWKS and SKX well over a year (about a year and six months and a year and seven months), and INBK for more than a year too. I had BOFI for about three years before I sold it. I held CELG and WAB for over two and a half years each. In no way am I a “short-term trader”. When I buy a stock, it’s with the idea of holding it indefinitely, actually for as long as circumstances seem appropriate, and NEVER with a price goal or the idea of trying to make a few points. If I try out a stock in a small position, and later decide it doesn’t fit, I sell it, and I really don’t care whether I gain a dollar or lose one. I just sell out to put the money somewhere better.

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 do it yourself, I’d suggest you read posts #4 through #8 at the beginning of the board, and especially the Knowledgebase that Neil keeps for us (currently post #9939), which is a compilation of words of wisdom, and definitely worth reading if you haven’t yet.

Hope this has been helpful.


For Knowledgebase for this board
please go to Post #9939.

A link to the Knowledgebase is also at the top of the Announcements column
on the right side of every page on this board



Thank you, as always for posting these month end summaries. They are very helpful.

Two quick questions:

  • It seems you have reduced your position in AMBA from 5,5% down to what looks like around 2,5%. May I ask, why you did this?
  • Also you took a position in CELG, what do you like about this company?
  • And a third, I see you passed on OLED, is it all around patent concerns?

Kind Regards & Happy New Year


1 Like

Justin, Sorry I’ve been traveling all day. Will try to respond tomorrow.

- It seems you have reduced your position in AMBA from 5,5% down to what looks like around 2,5%. May I ask, why you did this?

Hi Justin, I have been expressing my concerns for some time about AMBA because of:

Danger of commoditization
Danger that for television, getting better and better definition didn’t matter because the eye wouldn’t discriminate it, and cheaper “good enough” products might under cut it.
Because of insider sales
Because of low company outlook for next two quarters
Because of regulation of drones
Because of competition from Qualcomm

I ended up selling out of my entire position in December, when I needed money to buy some other things. Then when MF RB re-recommended and made some good points - like AMBA not being dependent on GPRO but on high quality video capture, and that there was more, and more, need for that it many, many areas, some of which we don’t even know about yet, but some of which are quite evident, like security cameras, I decided to take a small position again. (So what that means is that I’m slightly on the upswing, rather than the downswing).



- Also you took a position in CELG, what do you like about this company?

I was in CELG for over two and a half years until the price got really carried away earlier this year (hitting $139 at one point). It’s PE was way above it’s rate of growth. Now that it’s back down I reentered. I love the company and think it is very well managed. They have a few cash cow stocks, many more in development, the most in fact of any biotech, and have established partnerships with many new early stage companies like Juno in exchange for marketing the compounds later on. They also settled their patent case with a company that wanted to do generics of their biggest drug. They have more products in Phase III than any other biotech (tied with AMGN). In fact they have the most Phase III trials AND the most Phase II trials (not tied). Their revenue has increased consecutively to new all-time highs every quarter for the last ten years. And they just acquired another small company with a great drug. And they’re also a MF recommendation, so what more could you ask.



- And a third, I see you passed on OLED, is it all around patent concerns?

I just wasn’t comfortable investing much in a company which is essentially a patent troll. It may be a big mistake on my part as OLED screens may become a big thing and they may keep collecting royalties, but I don’t have to invest in every winner in the market. It doesn’t matter how the stocks I pass on do, as long as the stocks I’m in do well.



Thanks Saul very helpful.

Looking forward to a better 2016 investing wise.


and the pictures for those that like them……,C…

PS, glad to see you in Cybr, makes me feel better :wink: I still feel much better about ABMD than you do. I will plug Dycom too, I don’t see how their business is at all effected by problems in China, Brazil, the middle east, etc. The lay fiber for big carriers and have a strong growth rate, so I will still lobby for people to look at them, especially at these sale prices. Zacks#1 rating :wink:

Thanks for the great posts Saul.


Those are ugly pictures!

1 Like


Congratulations on another good year - you beat me again, darn it!

Here’s an excerpt from my 2015 review:

The performance figures here are as of the market close on 12/24/2015.

So first, the facts. My overall performance (xirr) across all of my accounts is 12.8%, which is fairly good, and I should be happy with.

                   xirr   % tot
SEP/IRA Brokerage  16.9%  72.0%
SEP/IRA Funds       4.7%  10.2%
SEP/IRA Total      15.3%  82.2%

Taxable             2.7%  17.8%

Total all accounts 12.8% 100.0% 

But what is bugging me is the poor performance in my taxable account. At the end of June, I had a twrr of 20.0% as reported by IB. At the end of September my twrr was -11.3%, and I have only just climbed out of that hole. (The twrr and xirr calculations give slightly different results.)

June	 20.0
July	 19.1
Aug	 -0.1
Sept	-11.3
Oct	 -5.8
Nov	 -3.7
Dec	 -1.0

What this means for the value of my taxable account is if I started off with 100, I withdrew 18.9 and ended with a value of 83.3. Fortunately my SEP/IRA more than made up for this.

You can read the whole thing here (SA subscription required). It’s mostly about options, so I won’t bore Saul’s readers with the details.…