Date 1/30/2021
== My allocation on 12/30/2020 ==
SYBL NOW (Previous Months)
-------------------------------------
CRWD 25.70% (26.03%, 16.05%, 13.69%)
DDOG 14.71% (18.14%, 20.20%, 17.68%)
NET 13.89% (14.76%)
SQ 12.08% (16.84%, 15.56%, 11.79%)
SNOW 6.12% (new)
SKLZ 2.17% (new)
PTON 1.64% (1.98%, 23.78%, 25.00%)
(dropping)
MGNI 0% (12.56%)
BABA 0% ( 3.11%)
ETFs 23.68% (6.58%) *Benchmarks
== Quick update on the portfolio change ==
I added new funds to my benchmark ETFs and CRWD, and these naturally bring down % of the rest of my investment. I dropped BABA and MGNI, and I added SNOW and SKLZ. For those who are curious about whether ETFs beat my “stock picking”, the answer is no – they are almost the same this month. Actually my benchmark performance is slightly worse but the difference <1% s so I need more time to form my own opinion.
Let’s get back to the stock discussion:
MGNI:
I noticed this stock after seeing mekong22’s post on 11/6/2020. I took some position and eventually I decided to close my position after the Spruce Point short report. I am less concerned about the content of the report but to me the (volatility) risk does not justify its growth potential. To me if a CFO creates a report that can be misunderstood by someone, it’s a risk I rather not gamble. I decided to close MGNI and BABA so I can add a position on SNOW.
SKLZ:
I’m taking a position because of the revenue growth and the high-profit margin. They seem to be the only platform that powers this business model so they have a moat as the first mover. Note that they allow you to convert virtual coins back to CASH. Building such a platform for the game developer requires another team and it makes sense to just use a service like Skillz (APIs/Services).
I posted my thought here: https://discussion.fool.com/introduce-skillz-sklz-34732631.aspx
CRWD/DDOG/NET/SQ:
Nothing changes. I don’t see a reason to make any adjustments (other than adding to CRWD as I can’t find a good reason not to fall in love with CRWD). But I’m paying close attention to Square’s coming earning call as I am curious what’s the potential impact to them post-pandemic.
== Benchmark fund ==
I was curious about my investment performance, and I somehow feel that I need to create a benchmark for myself. I asked: if I had not found this board, how would I allocate my investment? I will not put my money on Russell 2000 Index (e.g., VTWO). I won’t put my money on the Nasdaq Index (QQQ either). Even the traditional 80/20 (Stock/Bond) is not my thing. Since they are all ETFs (OT), I’m not going to discuss them.
== My annual return ==
2017 0.56% (About ~2 months, not investing too much)
2018 2.30% (Mostly FANG-alike stock, technical)
2019 14.34% (Give up stock selection, switching to ETF: QQQ, SPY and keep only Amazon)
2020 117.17% (Found and followed this board in April)
2021 -2.52% YTD
A little break down of 2021 (included benchmark)
JAN -2.52%
== My investment principles ==
My tax rate is very high, so if there are two stocks to trim, I will consider tax implications first, especially due to short-term capital gain, into my decision process. Namely, if two stocks are similar, I often sell the one I make less (or lose the most). However, I learned a lesson that I should NOT keep an investment for the sake of worrying about tax.
I usually avoid a stock when Saul (or any other experienced investor) gives some little “experiments,” or their conviction is low (<10% of their portfolio). I am fine with only keeping 4-5 stocks, and I may diversify my holding to cover non-Saas stocks, especially domains I’m familiar with or interested in learning.
I generally avoid stocks where I can see a clear headwind in the next six months, no matter how incredible the management team and the product are. Also, I get rid of an investment if I feel their growth will slow and the evidence of seeing a reacceleration. Revenue YoY means a lot to me for a growth stock.
For example, If in the earning call, the CEO/CFO says they are going to have some bumping rides (or headwind or slow-down) in the next few months, I trust them 100% because they have no incentive to lie for such a statement.
If a company’s future is too complicated for me to understand/predict, I will pass it. If I find a better opportunity, I trim the lowest confidence ones to make room.