Othalan's End of March Portfolio

For my own continuing education, I regularly evaluate my own investing performance, look at my successes and mistakes, and seek to find lessons I can learn in order to improve my investing skill in the future. As always, I offer this here for my own accountability and any edification or amusement you may glean from my experience.

For context:
2018 End of Year Summary: https://discussion.fool.com/othalan39s-2018-ish-portfolio-341302…


**Month      YTD Gain**
January    + 21.44%
February   + 33.55%
March      + 44.77%

_* All numbers recorded on the last day of the month_


In order to determine if it is worth my time to invest in individual stocks I keep track of the index funds I would otherwise be invested in: The S&P 500 and the mutual fund VSMAX which invests in small-cap stocks.

S&P 500:      +12.97% *
VSMAX:        +15.75% *
My Portfolio: +44.77%

* (S&P500 and VSMAX returns adjusted to match portfolio deposits and withdrawals)

All recorded on the last trading day of the month and calculated as per Saul’s recommendations detailed in “Saul’s Knowledgebase” linked on the right hand column of every post in this forum.

CURRENT POSITIONS as of 31 March 2019

**Stock                    Portfolio %**
Twilio          (TWLO)   18.0%
Alteryx         (AYX)    16.2%
MongoDB         (MDB)    14.2%
Zscaler         (ZS)     11.7%
The Trade Desk  (TTD)    11.0%
Okta            (OKTA)   10.7%
Square          (SQ)      7.7%
Elastic         (ESTC)    6.1%
Paycom          (PAYC)    2.7%
Guardant Health (GH)      2.5%
Smartsheet      (SMAR)    2.4%


The astute observer will note the above numbers add up to 103.3%, representing the use of 3.3% margin.
While I do use margin trading in small amounts, I always recommend against the use of margin and consider its use by far my largest risk factor.


Two lessons stand out over the first three months of this year, learned from my stocks Square and MongoDB, combined with an interesting book I encountered recently titled “Antifragile”.

“Antifragile” by Nassim Nicholas Taleb

Square (SQ): A high quality company will not fail when loosing a single person.

A lot of people, myself included, were concerned by the Sarah Friar leaving Square in October 2018. Five months later there is no indication that this has been detrimental to the company though the stock price took a significant hit and still has not fully recovered. We all miss Sarah Friar as she is highly charismatic and interesting to listen to. Yet Square seems to be a robust company with high quality products and capable management. I am satisfied with my investment though I have reduced the size relative to other companies I am invested in simply because I have even better options available.

MongoDB (MDB): Trust high quality companies!

MongoDB suffered severe concerns recently with the announcement that Amazon was providing a nosql database compatible with MongoDB’s previous release. Rather than indicating imminent doom for MongoDB, the most recent quarter was remarkable beyond anyone’s expectations. I vacillated on how this would effect MongoDB and ended up selling a third of my investment right before the earnings release only to buy back most of what I had sold after hours missing out only only a small portion of the jump in price from the spectacular earnings announcement. Amazon is such a behemoth I cannot help but be concerned yet I will hold to my investment and trust in the robustness of MongoDB.


A few additional thoughts on my investments.

Smartsheet (SMAR) and Elastic (ESTC)

I have taken a small position in Smartsheet and a slightly larger position in Elastic. However, I am uncertain about both companies. The growth numbers look great for both, especially Smartsheets. However I have not yet been able to get a feel for the quality of management for either company in the way I have for most of my other investments. This has me hesitant to increase my investment in either company.

Guardant Health (GH)

Guardant Health is an aberration in my portfolio. I still don’t trust my knowledge of biotech stocks and how the FDA process effects them. However, the wide pre-approval for Guardant Health’s liquid biopsy by insurance companies is so promising I am using this company as a vehicle for my continued education in a different type of company.


If it ain’t broke, don’t fix it!

Looking back at some of my previous investment decisions, I am lately often going with a philosophy of, “if it ain’t broke don’t fix it!” I have no clue what the correct portfolio allocation is between so many amazing companies so I try and touch my allocations only with a specific reason. This has led Twilio to remain a bit larger a position size than I would have allocated to it in the past and Zscaler to remain a bit smaller.

The flip side of this is that I am becoming quicker to make changes when something is broken. In the past two months this has led to a number of rapid changes which have more clearly benefitted my portfolio than my past philosophy.

No clue if this is good or bad yet I am satisfied with the results so far.


You might like to read this post from TMFChessehead on the AntiFragile framework he setup based off of Nassim Taleb’s book Antifragile and has evaluated many different stocks thus far using it.