Philip Roth portfolio update through July 2023

I have two portfolios very close in size and invested pretty similarly. I use my IRA for these monthly updates because it is easier to track since it has very limited options activity and no money flowing in or out of it. Where there are large discrepancies between this portfolio and my overall positioning I try to note it. Once again, I find myself with too many other time commitments to do the type of update I would like to do. Plus, I am kind of bad with/bored by spreadsheets. I’m in a bit of a Catch-22. I’d be a better investor if I had more time to dedicate to investing, but the only way I think I’ll have more time to dedicate to it is if I make enough money to enable me to quit my job. I’m still pretty far away from that, I think. Though I’m certainly a heck of a lot closer than I was a couple of months ago.

Performance through 7/31/23
YTD 67.81%
1 year return 33.58%
3 year return (cumulative) 28.98%

Year to date I’m doing great, but the performance of my other portfolio, the harder-to-track one, is even better–up more than 90% YTD. If I had to give one reason for my success this year it is this: I have been betting very big on AI. I think it’s real. Sure, there’s lots of hype, and lots of companies that are up massively on that hype will come crashing to earth, but I am stupid enough to believe I own the right ones, at least for now.

Portfolio allocations through 8/1/23
Pagaya PGY 23.715%
This has been a massive home run for me since I brought it to the board on May 30.

It was at $1.11 then, and now it’s at $2.60. I would say “you’re welcome,” but no one in the monthly update club seems to own it. I admit I didn’t make a very strong case. I just found a couple of articles and said “read these.” Maybe I’m just lucky, but I don’t think so. I think AI-powered lending is a really smart idea and I think Pagaya is in a better position than Upstart (for now) to take advantage of it. Plus the shares are cheaper by several measures. I should probably sell some, but I still feel like this stock hasn’t really been discovered yet.

SoFi SOFI 13.87% (much higher allocation in my other portfolio)

I thought Monday’s earnings report from SoFi finally blew the skeptics away, but today we had a couple of downgrades and the shares fell nearly 10%. I added a tiny bit but I’m already kind of maxed out. I’m not sure if SoFi is better than BILL or CRWD or ZS. I just feel like I understand it better, and I see a stock with great management and an exciting runway ahead of it that is subject to significant unwarranted skepticism. Eventually, the skeptics will be proved wrong, and this stock will explode. Or maybe it will just keep rising steadily for a very long time.

AEHR 11.10%
I’m a bit out of my comfort zone with this one, but posts by Saul and @wsm007 really convinced me I needed to make a bit bet on this stock. I got in kind of late, around $40, but I’m still pretty happy.

UPST 5.3% (under 2% in my other portfolio)

I keep trimming this every time it goes up because I already have so much exposure to Pagaya, but if they can get back to the same earnings they had in 2021, even at half the valuation, it’s a $200 stock. Interest rates are probably not going much higher, the economy seems like it can avoid a recession, so why wouldn’t they get back there? Maybe Pagaya will stop them? Doubtful, as I think we are still in very early days for AI-powered lending.

Everything else–roughly 46%

I have LOTS of small positions, many of them in names very familiar to this board (IOT, CRWD, ZS, BILL, AXON). One I don’t see discussed much here is Palantir. I don’t feel very confident about it, but it’s AI and it scores well on a quantitative service I use, which many of my other stocks don’t.

Stocks I own a lot of in my other portfolio, though I have little or no allocation in this one.

I know this was rushed. I hope some of you still found it useful. Feel free to ask any questions you may have and I’ll do my best to respond.

June update

May update