November Portfolio Update

Portfolio Update 11/16/19 as of 8AM.

It’s been a month since I posted my October portfolio update found here;…

I have found doing these updates is helping me keep better records of my investing thought processes over time. Much like keeping a journal in life when you re-read in the future it helps you remember what your thoughts were at the time of writing. Hopefully others find this helpful as well.

My portfolio monies are NOT all in tax free accounts any longer. Thus I do have to worry about tax consequences of my trading actions for a percentage of my portfolio. So far this as not been an influence on my investing style.

Current Portfolio as of 11/16/19.  
Change since 10/13/19  -9.7%. 
2019 YTD +16.9%.  		 S&P 500 +25.2%	      Nasdaq +30.6%  	   Dow +11.3%

Stock		Current	 	       % of Port	      	% Change 		        Market	
		% of Port		on 10/13	   	in port since 9/15	   	Cap

AYX		  29.2			27.6			+1.6				+6.3B
ZS		  20.0			19.1			+0.9				+5.7B
ESTC		  18.2			13.5			+4.7				+5.8B
MDB		  14.8			13.9			+0.9				+7.4B
ZM		  12.4		     	 2.9			+9.5				+18.3B	
CRWD		   5.4		    	 4.5			+0.9				+13.0B
TWLO		     0			12.6			-12.6			
CASH		     0			 5.8			-5.8			


New positions since last portfolio update: NONE

Exited positions since last update: TWLO

Trades between 10/13-11/16

Bought 		ESTC		10/22	        $69.42
		ESTC		11/1	        $71.73
		ZM		11/4	        $70.26
		AYX		11/4	        $99.24

Sold		TWLO		11/1	        $96.50

Thoughts on trades and companies for the month.

Last time I held a zero cash position in my portfolio was on 12/22/18, which turned out to be the very bottom of the market at the time. I had gone cash between 10/11/18 to 11/22/18 which can be verified here:…. It turned out to be a few weeks early on deploying all my cash reserves but as many know and preach timing the market is near impossible.

So of course I am going to stick my neck out on a limb and say I believe we are near bottom for our growth stocks. Now I could be a few weeks early, but better than being a few weeks late (or of course I could be completely wrong). My portfolio definitely not doing as well as many on these boards. When I compare to the Dow, S&P and Nasdaq I am lagging. Last year about this time I was at 21.8%, now currently this year I am at 16.9%. I have not lost faith in my companies, I believe I am positioned to out gain the indices going forward.

Part of my under performance can be attributed to some inherited monies I received earlier in summer. It increased my cash holdings to level where I wanted to deploy my capital. I like holding cash when I think markets are frothy but I also do not like holding too much cash as one never knows what markets may do. I bought some significant positions in some of these companies during the start of their price fall.

I also need to obviously look at some of my decisions. I was starting to worry about TWLO in June, but then I read a post by Bert that changed my outlook, instead of just holding or reducing like I had been thinking, I bought more in July. That turned out to be a mistake, but instead of holding after the downturn I decided to move on. I am not concerned by my portfolios current under performance because I have many years of experience and understand that these ebbs and flows are part of investing.

Number one holding AYX 29.2%. What’s to say, everyone on the board believes it a great company with great numbers. If someone disagrees with that statement please chime in as I have a LOT of money invested in the company and would love to hear different opinions. I have seriously considered increasing my position however at ~30% of my portfolio its already the dominant company. I obviously believe this company has a great opportunity to appreciate in value from here. I would like to see them develop a cloud presence.

Number two holding ZS 20%. This is a company that everyone does not agree on. Saul reduced his position in the company as did many others due to a predicted slow down in sales. Zscaler hired Dali Rajic for CRO what looks to me to be a great addition to their company. I believe the search was over a year (that in itself is amazingly patient!). Gotta believe they got that correct based on what I have read. Is this stock going to take off soon? Most likely not. However my personal belief is this stock/company is the most special of any in my portfolio. I believe the technology and talent is above their peers. I think this will be a much, much larger company in the future. I see holding this stock for a very long time as long as its market opportunity plays out as I currently believe it will.

Number three holding ESTC. Lots of debate on the boards on this one lately. I have to say it has forced me to re-review my conviction in the stock/company. The open source software does give me some concern. However after reviewing; customer count keeps improving and revenue growth the same. They are burning thru more cash, however they have been doing a lot of hiring. Number one expense in a growing company is acquiring talent.

Why I am personally going to stick with ESTC until this next earnings call in a few weeks (also is why I believe it has the most opportunity of any of the stocks this board follows to increase in price the next few weeks). I think next they lose the y/y headwind. From the Q1 earnings call transcript;

Tyler Radke – Citi – Analyst

Great. And then maybe a follow-up, as we think about the guidance for next year, maybe just help us understand your expectations for the SaaS revenue business. I know you made some changes with the warm-hot architecture, which I think offered more favorable pricing to customers based on their memory usage. But just help us understand the context of that as we think about the growth in that line for next year.

Janesh Moorjani – Chief Financial Officer

Hey, so this is Janesh. Happy to do that. Overall, we remain very bullish about the SaaS opportunity that we see ahead of us. You’ll see that for the past few quarters, our SaaS business has continued to grow faster than the self-managed business.

Broadly, I’d say we’d expect that trend to continue in the future. We don’t do anything that tries to influence customer behavior one way or another. We are relatively agnostic when it comes to customer preference in that regard. And so we’ll continue to serve the customer in the best way that makes sense for them, but we do expect that that business will grow a little bit faster than what we’ve seen before.

The other piece I’ll just take the opportunity here to point out is that we made the architecture changes that you talked about around three quarters ago. And in conjunction with that, we had launched our revised pricing model. And so we’ve still got one quarter of that pricing headwind to go before we lap that at the start of Q2 of this fiscal.

Number four holding MDB 14.8%. This really is all about what others hear are saying about the move to NonSQL and this being the most popular database to go with. The Atlas numbers show its popularity and strengh. It is not nearly as high of a conviction stock as the first three. If I thought I had better places for the money, I would reduce the size of my position.

Number five holding ZM 12.4%. Profitablity combined with growth. What not to like? Valuation possibly. I am not sure it has the greatest chance of appreciation in my portfolio currently. However I see ZM as company of the future. I had mentioned before the IPO I was interested in it because it has customer evanglism. I have had multiple people tell me to set up ZM for a busiess meeting. That kind of thing makes me take note of potenital investment opportunity.

Number six holding CRWD 5.4%. Obviously not my highest conviction. Mostly going on what others on this board are saying about the company. I could easily see me selling out of this position in near future if I felt I had better opportunities elsewhere.

Hope everyone has a great Thanksgiving. I personally am thankful to all that contribute to this board!

As always any suggestions or questions feel free to email me.


Great writeup, thanks Retirementdough

Regarding Elastic,

And so we’ve still got one quarter of that pricing headwind to go before we lap that at the start of Q2 of this fiscal.

If they said this on the Q1 earnings call (after Q1 had ended) and they expected to lap the headwind “at the start of Q2”, then why would they still have one more quarter of the headwind to go? Wouldn’t they be all clear going forward with the better comp kicking in, in the very next quarter they will report?



I would like to see them develop a cloud presence.

Why? Would this solve a business problem for AYX customers? Alteryx products operate on data. Is that data already in a public cloud or is it on-premises? How would customers react if they were told that in order to use Alteryx products, they need to spend money to transfer data into a public cloud provider, possibly spend money on a high speed dedicated network link if they need to transfer lots of data, and then trust that their data would be secure in a public cloud? Is Alteryx useful for processing data in edge networks?

Wouldn’t they be all clear going forward with the better comp kicking in, in the very next quarter they will report?

This is correct. The headwinds ended the last reported quarter ending July 31. The pricing effects, which effected only SaaS, were effective as of Aug 1, 2018, the start of ESTC Q2, which is the comparable quarter that is getting ready to report.

So this means this is the first quarter of like to like comparable.

Here is the effect on SaaS rev and sequential $ growth. Q1 ends July 31.

Q1 2018 - $10.3M
Q2 2018 - $10.0M (-$0.3M)<-start of price change
Q3 2018 - $11.7M (+$1.7M)
Q4 2018 - $13.8M (+$2.1M)
Q1 2019 - $17.6M (+$3.8M)

Q1 2019 SaaS growth rate was 71%. If Q2 adds zero sequentially SaaS growth rate would be 76%. Zero growth would be an acceleration due to the pricing changes that started in comparable quarter. Every dollar of SaaS growth is further acceleration of SaaS growth. For instance adding just $2.4M gets you to $20M SaaS revenue and 100% growth.



This is correct. The headwinds ended the last reported quarter ending July 31. The pricing effects, which effected only SaaS, were effective as of Aug 1, 2018, the start of ESTC Q2, which is the comparable quarter that is getting ready to report.

So this means this is the first quarter of like to like comparable.

Thanks for confirming, Darth

It looks like Rdough just had a typo in the op, that the quote about the headwinds was actually from the Q4 earnings call (not Q1), so that’s why they said at the time that there was still another quarter to go (back then).

As of now, the headwind will be in the rear view mirror going forward



Well I had the same thought, they possibly they do not see the revenue benefit until Q3. Either way I would think they would give greater guidance for Q3, which I would hope would influence the price upward. They are supposedly reporting the end of this month, so should know soon.

If there is no “extra” positive to the c.c. I would most likely be looking to lighten my position.

Yes my fault,

I grabbed it from a previous post of mine. I thought it was from Q1, but Q4 makes sense.

Thanks Darth!

Hi Johngalt2020,

Why would I like to see AYX develop a cloud presence? I see more and more people and companies moving to the cloud for their computing needs. I see it as an alternative to what they currently offer not as a must do, so I would not think that it would affect current customers unless they wanted to move to the cloud platform.

To clarify my thinking. I own a couple of companies which use Quickbooks software for bookkeeping/accounting. A couple of years ago I went with Quickbooks online (data stored in the cloud) for a couple of my businesses. On a couple of other companies we stayed with desktop version.

Fast forward to current day. I can share QB online with accountant, new employees, etc. Its very easy to “share” within the organization. The desktop version not so much. Got get updated data from the computer its stored on, need to send the CPA information they need, etc.

Basically the cloud version of the software is much better in my opinion. INTU the company that produces QB can update the software in real time to the cloud, new reason for new version of software to be installed on desktop. I will be moving all companies and any future companies to cloud version.

This is basically what I was saying I want to see AYX do. Why? Because if they do not do it someone else probably will (actually probably already is working on it). But just like INTU, they already have the customer base and could gain cloud traction quicker than anyone.

I am sorry I do not know what an Edge Network is. I do not claim to be a techie. I just look at the numbers of the company and the practical application as it relates to my understanding.

It is very possible I am misunderstanding something, feel free to clarify for me if I am.


in a CC the CEO of Alteryx said he is not hearing much demand for a Cloud version. The data base can be in or out of the cloud so the need for a Cloud version of Alteryx might depend on whether the program requires a fast expensive computer and whether there are lots of PITA updates. And as you mentioned, whether a lot of sharing is needed.
OTOH I see most software moving to the Cloud as the internet gets ever faster and more ubiquitous.


RetirementDough (and others) … I think there is a misunderstanding here. No one doubts the potential benefits (and risks!) of cloud-based data. If that is where your data is, then AYX has no problem processing it, either based on a cloud-based install or the existing pipeline which makes the data available locally. Development is done locally, regardless of where the data resides, but execution happens wherever it is appropriate to happen. It is unclear to me what AYX is missing here … unless it is the buzz of SaaS. The development component is always a single user and so there is no advantage in a cloud or shared instance. The deployment can be local or dispersed, and that is supported with current software and licenses.


Ryan, your entire equity portfolio seriously consists of 6 stocks at the moment?

Yes sir.


I don’t understand the issue with AYX cloud v. on prem.

They are agnostic regarding the residency of the data. Matters not if the data is cloud or on prem. The s/w runs on prem but the data can reside wherever it resides.

Is there some advantage to having the analytics hosted on a cloud server? I don’t know what that might be. Anyway, if they had customer demand for hosting analytics on the cloud I’m reasonably confident they would develop a version to address the demand. But without demand it would just be a waste of R&D dollars to develop this s/w just so they could say they have it.


Is there some advantage to having the analytics hosted on a cloud server?

If the data to be analyzed resides primarily in the cloud, there could be a plus in having the execution done on the same server or on servers connected with very high bandwidth … but, that is a solution they already have. The only thing that is locked on prem at this point is development, but that inherently wants to be done on the machine right in front of you.

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