Philiproth May summary


After following this board and commenting occasionally since roughly March 2020, I have decided it’s time for me to post a monthly update. I am a bit worried that doing so will prompt many of you to say “Where is the rigor? Where are the spreadsheets? He should do himself a favor and stick to ETFs.” Maybe in part I am posting the monthly update to see if, after posting it, I don’t come to the same conclusion myself. Or maybe I will learn something else that will help me become a better investor.
I am immensely grateful to Saul, Bear, XMFRob, WSM007, stocknovice, rmtzp, muji, gauchorico and several other regulars whose posts on this board have taught me a lot about investing, even as my performance so far leaves a lot to be desired. I won’t give tons of detail on my performance because I rely heavily on Fidelity’s monthly, YTD and multi-year summaries, and because my pre-2020 performance is really embarrassing. I missed out on a massive bull market from the time I started investing around 1999 until March 2020 and I have a lot of trouble forgiving myself for not just sticking with ETFs that track the major indices during that time.


So here’s what I’ll share, performance-wise:

YTD Performance through May +19.79%
last 12 month performance through May -14.15%
last 3 year performance (cumulative) through May +11.41%


Now for my portfolio. Many of my stocks are not Saul stocks, though my understanding of what constitutes a Saul stock is less clear lately, and I suspect I am not alone in my confusion. I also own way too many small positions. Try as I might, I can’t seem to cure myself of the temptation to take a tiny position in something which I think is interesting but where I have very little conviction. I won’t list all the stocks, and I will write little or nothing about stocks which I feel certain are not Saul stocks. I know I am not quantitative enough in my investing approach, and I do too much copying of other investors rather than making up my own mind. I think I’m slowly learning the quantitative side, but I have a long way to go. I won’t discuss options, but I do own some and will do my best to include them in estimating my exposures. (note: I have had to edit this section a couple of times because I keep forgetting about small positions, which is making me realize-- in my effort to make this all add up to 100%–that I am also overestimating some other exposures. Options and my own laziness are the culprits. Sorry–doing my best but there is only so much time I am willing to dedicate to investing.)

Current portfolio (Though June 2):

Pagaya (PGY) 22.5%
I introduced Pagaya to the board here. I didn’t do a very thorough job as I hoped to let the Seeking Alpha writer I linked to in that post do the heavy lifting. It seems that article is now behind a pay wall, and the discussion that has ensued around Pagaya isn’t very edifying and it seems to be turning into an UPST discussion. Someone also added a Motley Fool link in there. That article is worth reading, but not nearly as thorough as the Seeking Alpha one. At this point, I don’t have much to add about Pagaya beyond what I wrote in my initial post. I don’t see the point in just rewriting the Seeking Alpha article here, plus if I did it would be semi-plagiaristic.

ENPH 11%
Not quite sure how to value this one, but at least its profitable and the P/E seems reasonable given the growth rate. I don’t love what we learned during the last earnings report, which is that this stock’s performance will have a pretty strong correlation to housing and interest rates going forward, at least in the U.S., barring some legislative change. One thing I really like about it was the two insiders who bought it in the 150s and 160s after it crashed post-earnings. I probably put too much emphasis on insider buying, but I do think it is usually a strong bullish signal.
SMCI 11%
The big runup here has me a bit nervous. I had a smallish position and added too much at the top , but I do think this is a great “picks and shovels” play on AI. I don’t think AI is a fad and I don’t think it’s overhyped. I think it’s still very early days in AI.
DDOG 5.5%
This used to be the only stock that everyone was unanimously positive about on this board. Now–not so much. I don’t really understand it, but I feel pretty sure it’s going to be a good-to-great grower and that holding a 6.5% stake isn’t going to get me into much trouble. I like that Stan Druckenmiller has owned it, even if he doesn’t own it any more. He appears to have been bullish on cloud early enough to make good money on it and it sounds like he still sees value in cloud, if not necessarily DDOG.
We discuSs this stock this way too much and I’m as guilty as anyone.
CRWD 5.7%
I have a lot of trouble deciding which cyber stocks to own, but this feels like a fairly steady one. As with DDOG, I like that Stan Druckenmiller has owned it, even if he doesn’t own it any more.
I guess I’m mostly copying Bear here. I don’t have a lot of conviction on this one, but management does seem to be pretty solid and dependable–hitting their growth numbers while being a bit more conservative in the current environment.
Mainly just an AI play. I did pretty well with this and have been trimming.
TTD 3.4%
I feel like the CEO is a visionary and that this is just a very solid company–posting very strong numbers compared to peers in a challenging ad market. This was my biggest position not too long ago, but I felt like it was getting too expensive, so I’ve done a lot of selling recently. I just looked at some numbers on Friday and it was less expensive than I thought. I will definitely buy this back on any weakness.
S 2.9%
I defended this one on this board after the most recent earnings report, but decided I was wrong and cut my exposure. I’ll probably look to cut more. Thanks to those who talked me out of this one–I think.

LMND 2.8%
Another AI play, and I think it’s pretty cheap on a P/S basis, compared to other tech growth stocks. It is pricier on a P/S and P/B basis than big insurers, but not by all that much. Given the disruption potential, this seems like it could be a huge bargain.
SNOW 2.2%
I cut back a lot in the 170s and 180s ahead of their latest earnings, bought back a bit in the 150s, and have been steadily selling as it’s gone up. Given all the negativity after the last earnings, and Saul’s pointing out that this is still very expensive compared to others he owns, I was ready to dump this one, but it seems like it might be an AI beneficiary. I guess I also like that Berkshire Hathaway bought it, but their track record on tech ain’t so hot. Then again, their biggest mistakes appear to have been missing out on tech winners rather than picking tech losers. And they got some criticism in their most recent earnings call for saying they didn’t understand the reason their customers were cutting back, but I’m wondering if that actually isn’t a bullish sign. CEO Frank Slootman is seen as a visionary, and maybe his being willing to admit he doesn’t understand why his customers are buying less of his product can be seen as a demonstration of self-confidence.
MNDY 1.5%
I have never liked it but the numbers are impressive and Saul loves it. I will probably just keep selling little bits of it as it rises and buy back a bit on weakness.
ZS 1.4%
I’m mainly just copying others on the board. I wish I’d owned more, but I got nervous when the number 2 executive mysteriously jumped ship. I keep trimming as it rises but I might stop doing that and look to add on weakness.
GLBE 1.2%
SOFI 1.2%
NET 1%
Still not cheap and now we know it’s not consistent. But I guess the market still sees potential for big things from them.
Remember them? Very cheap compared to NET and maybe making a comeback.
NVDA 0.9%
I took a quick 5% stake at around $380 and sold most of it in the high 390s decided SMCI is a better way to play the same idea.
AEHR 0.4%
I sure wish I owned more, but I have no idea how to value this and it has run up a lot. I am hoping for a pullback so I can buy more.
Other 0.8%
IOT 0%
I sold this ahead of earnings and am now kicking myself. I thought I had a a pretty good reason for selling, which is that a big part of their business appears to come from trucking companies, which are struggling. I get that this could actually be seen as a positive, because trucking companies save money by using IOT. But I heard a similar argument with UPST. UPST bulls used to say that UPST would do well when credit tightened because its more accurate underwriting would become more valuable. Things didn’t work out that way–at least they haven’t yet. I worried that when an industry is struggling, they can’t think about investing MORE to save themselves, even if those investments save them money. When a ship is sinking, people panic and do stupid things. Or so I thought. I guess IOT is proving me wrong.

FInal thoughts
If you’ve stuck with me this far, thanks for reading. I wholeheartedly encourage thoughtful comments and questions. But please do try to be thoughtful. I love the rules of this board, but despite the best efforts of Saul and others to police the lame comments, there are still too many lame comments. I hope my commentary doesn’t fall into the lame category.


Nice writeup, @philiproth. Welcome to the monthly recap club.

i hope you keep it up. It’s always good to hear another perspective and thought process.


First of all congrats, on your gutsy move into the world of transparency. Feel free to take my concerns with a huge grain of salt.
I am an actuary by training and I know that disqualifies me from talking about disruptive insurance companies on most TMF boards, but maybe this will be the exception. I took a small position in LMND a few years back and rode it up and part way down before bailing out. Here is why I sold despite some pretty impressive growth.

  1. Inconsistent analysis and results - as the company grows, more and more the existing block of business dwarfs the new block (recent sales). So when they say that they expect big loss ratios in the first year, then the LRs should come down rapidly after 3 or 4 years because the first year business with the bad LR is a smaller part of the whole pie. For the most part this hasn’t happened. It did this past quarter on a gross basis, but net of reinsurance, LRs actually grew. Which means the business they kept performed worse than the business they reinsured.
  2. The story about 1st year LRs being worse than renewal years. That story makes perfect sense when we are talking about dental insurance. Often, when a company first buys dental insurance, in the first year, their employees catch up with office visits and dental work that just wasn’t being done regularly prior and that initial loss ratio is ugly. Then, in year 2, it comes down. But is there an analogy for homeowners, car insurance or pet insurance? What, they catch up by burning their houses down, crashing their cars or killing off Fido? I don’t think so.
  3. Then there is the co-CEO, whose smugness and confidence belies the fact that self-proclaimed smartest guys in the room often aren’t. If all the legacy insurance CEOs were so jealous of his company as he claims, why not buy it ?
  4. Insurance companies that pay claims so quickly may, and I mean MAY, be open to some fraud.
  5. Their initial pricing models sucked pure and simple so they had to go back and apply for lots of rate increases to help improve LRs. Which is, of course, what all the boring, dumb legacy guys do when their LRs suck.

I hope to join you some day in your monthly analysis - congrats again!


Thought I should update this by saying that I dropped my PGY stake to 13% and raised SOFI to 10%. I still think PGY is absurdly cheap, but I worry that if the market falls again while I’m waiting for it to be discovered, I will be stuck in it for a long time. SOFI seems more solid, even if the upside may not be quite so enormous since the market is clearly catching on to it.