Happy Labor Day early, FastTrackers,
You know how sometimes when you plod along day by day and then week by week, it seems like you’re spinning your investing wheels? Or is it just me? Seriously, it seems that I’m losing sometimes for long periods and the market does the opposite of what I expect. I guess maybe it’s just the wrong view point. Anyway, my ports have become so complicated–not big, mind you, just complicated–that I can’t accurately figure out my returns by using individual transactions. In fact, I would like to hear how you folks handle this, or if you even do. Maybe you don’t worry about it. That’s probably it. I guess I’m a little gun shy that someone at some point will challenge my statements because, well, sometimes I’m tempted to do just that. Then I regain my senses. Usually.
A couple of months ago, one of our ports received a larger than usual deposit. That’s not an everyday problem in my neighborhood because I retired 16 years ago, so with no income, can’t make deposits in my personal accounts. But my wife works and I take her 401-k and transfer it into her IRA annually. I recently let it slip awhile (ok, maybe it was something like 2-1/2 years) and when I got around to making the transfer, it was large enough that it kind of swamped the account. That wouldn’t be so bad (notice you don’t hear me complaining) but I also invest for a few other people and I recently wised up and starting to use this one small-but-not-the-smallest account (still tiny for a Saul or a Paul, but … you do what you gotta do, right?) for a template I guess you could say, and then buy, sell and trade the same percentages in the other accounts. Are you still with me? Amazing. So now as far as tracking returns I’m kinda lost. It’s time for some port changes anyway and with this little infusion, I almost have to sell everything in all accounts and start over to keep them remotely balanced. But I don’t want to see commissions rack up in the other accounts. See where this is going? On top of that, everyone at Saul’s Deli likes to hear how everyone else is doing, and how do you account for all the changes in a relatively straight line when the real world is all curves? Other than using Microsoft’s XIRR function and entering every single detail of every single transaction, I don’t know how to accomplish such a thing. So I’m just going to show you what I own and what I’ve done, and then run some simple gain calculations on the “template” account.
MELI Bought twice but didn’t last long. It’s doing okay IMO, not great, but it’s going nowhere and we only have a few months
to double our money this year.
ANET The harder I look here, the more I’m finding to like. Unless the red flags show up, I’ll probably add shares.
TTD I’m sick of advertising, but the Desk lets their customers chase them as opposed to the Viagra commercials. I like that.
MELI Got impatient, no regrets allowed. Lost on one load, gained a bit on another. Big whoop.
VEEV Too complicated. For the customer to implement, for me to truly understand. Life’s too short. Adios!
KITE The umpteenth time time I’ve had shares stolen. This time it wasn’t Buffett, who’s robbed me of 3 companies in just the last few years.
LGIH As a retired home designer/builder/contractor, I’m likely industry biased. Probably a mistake.
AAOI Got my butt handed to me. That’s why I said earlier that KITE saved it this time. Oh, my Poor Butt.
Good grief, someone pick Saul up off the floor, I think he’s having some kind of attack and I don’t blame him one little bit. Get him some water and after that, let’s just dive in and if you have questions, fire away. If you’re too bored (don’t blame you for that either) just follow Saul to the infirmary and I apologize. (But give the bill to Saul, ok?)
On the morning of 8/31/17, I knew those changes were due in our holdings and I wanted them for the new month. Here’s what I started out with, and how each holding was doing. “Size” is the percentage of the portfolio attributed to the holding. “Conv” is my strictly subjective level of conviction where 10 would be a SHOP plus guaranteed returns of 50-100% returns for life, and 0 would be a company I ran across the other day that’s been public a couple of years with not one product sold to date. Their plan is to sell the hardware, software and drone for drone security packages for larger homes. I almost coughed up my Wheaties when I read that, but now that I’ve told you about it, they’ll probably become the next Amazon. (Fat chance, I still think.) “Days” is the period a position has been held, “Stra’gy” is a shortcut for Strategy only because TMF’s ‘Table Format’ app is a distant dream (read nonexistent) and these tables won’t work with the extra letter. Think I’m kidding, do you? Ney!
Note the large-ish cash position due to my lazy attendance to transfers from DW’s 401-k. Ouch. And how am I going to buy so many stocks in the middle of the longest, steepest rise for fast trackin’ stocks I’ve ever witnessed?
Notes on Returns: Gains as shown include commission and fee expenses but do NOT include dividends which are in cash. CAGR includes ;all gains, dividends and expenses.
Ports 8/31/17 @ OPEN ordered by size
**Ticker Equity Name Bought Size Days Conv Stra'gy Gain % CAGR** TTD The Trade Desk Inc. 08/10/17 7.9% 25 3 Watch (0.7%) (10.9%) SHOP Shopify Inc. 02/27/17 7.8% 189 8 Hold 80.3% 212.8% MU Micron Technology, Inc. 05/11/17 7.2% 116 3 Watch 11.6% 42.3% VEEV Veeva Systems Inc. 05/10/17 6.6% 117 3 Sell 7.8% 26.9% KITE Kite Pharma, Inc. 07/21/17 5.8% 45 4 Watch 61.8% 6,080.6% ALGN Align Technology, Inc. 05/10/17 5.5% 117 8 Hold 27.8% 118.4% PAYC Paycom Software, Inc. 06/05/17 5.2% 91 3 Hold 13.9% 70.1% PYPL PayPal Holdings, Inc. 05/01/17 4.8% 126 7 Hold 29.6% 114.8% MA Mastercard Incorporated 02/21/17 4.3% 195 8 Hold 21.9% 45.1% SWKS Skyworks Solutions, Inc. 05/01/17 4.1% 126 6 Hold 6.6% 20.9% FB Facebook, Inc. 03/21/17 3.8% 167 8 Hold 23.9% 61.1% GOOGL Alphabet Inc. 03/21/17 3.4% 167 7 Hold 12.2% 29.2% ANET Arista Networks, Inc. 08/23/17 2.9% 12 5 Hold 1.7% 86.6% MELI MercadoLibre, Inc. 05/19/17 2.9% 108 2 Sell (13.4%) (39.2%) FB Facebook, Inc. 04/23/15 2.8% 865 8 Hold 106.9% 36.1% GOOGL Alphabet Inc. 05/20/15 2.8% 838 7 Hold 76.1% 28.1% PAYC Paycom Software, Inc. 05/22/17 2.4% 105 6 Hold 15.1% 65.3% CSX CSX Corporation 04/07/15 1.6% 881 6 Hold 53.1% 19.4% CSX CSX Corporation 04/13/15 1.3% 875 6 Hold 53.6% 19.7% MELI MercadoLibre, Inc. 08/21/17 1.2% 14 2 Sell 6.9% 630.5% (Cash) USD 01/01/17 18.1% 365 0.0% 0.0%
During the day on 8/31 I dumped some losers and some low-conviction stocks which will now rise in price like you wouldn’t believe. That’s ok, it’s just the way it goes sometimes. So here’s what I ended up with at the close. Again, note the cash position after the sales and of course, the transfer hangover from a couple months ago. (Guess I’m too busy posting to study new vesting prospects.)
Ports 8/31/17 @ CLOSE ordered by size
**Ticker Equity Name Bought Size Days Conv Stra'gy Gain % CAGR** TTD The Trade Desk Inc. 08/10/17 7.9% 25 3 Watch (0.7 %) (10.9%) SHOP Shopify Inc. 02/27/17 7.8% 189 8 Hold 80.3 % 212.8% MU Micron Technology, Inc. 05/11/17 7.2% 116 3 Watch 11.6 % 42.3% ALGN Align Technology, Inc. 05/10/17 5.5% 117 8 Hold 27.8 % 118.4% PAYC Paycom Software, Inc. 06/05/17 5.2% 91 3 Hold 13.9 % 70.1% PYPL PayPal Holdings, Inc. 05/01/17 4.8% 126 7 Hold 29.6 % 114.8% MA Mastercard Incorporated 02/21/17 4.3% 195 8 Hold 21.9 % 45.1% SWKS Skyworks Solutions, Inc. 05/01/17 4.1% 126 6 Hold 6.6 % 20.9% FB Facebook, Inc. 03/21/17 3.8% 167 8 Hold 23.9 % 61.1% GOOGL Alphabet Inc. 03/21/17 3.4% 167 7 Hold 12.2 % 29.2% ANET Arista Networks, Inc. 08/23/17 2.9% 12 5 Hold 1.7 % 86.6% FB Facebook, Inc. 04/23/15 2.8% 865 8 Hold 106.9 % 36.1% GOOGL Alphabet Inc. 05/20/15 2.8% 838 7 Hold 76.1 % 28.1% PAYC Paycom Software, Inc. 05/22/17 2.4% 105 6 Hold 15.1 % 65.3% CSX CSX Corporation 04/07/15 1.6% 881 6 Hold 53.1 % 19.4% CSX CSX Corporation 04/13/15 1.3% 875 6 Hold 53.6 % 19.7% (Cash) USD 01/01/17 34.7% 365 0.0 % 0.0%
Also, as we measure our holdings, I don’t know about you, but I know that sometimes my realized gains are actually realized losses. I try to sell losers and grow winners, don’t you? So maybe HOLDINGS don’t present a complete picture. For measurement strategy, what’s left but to go directly
From the Statements
**Month Gain CAGR/mo CAGR YTD** Jan 1.6% 21.1% 121.5% Feb 1.4% 19.6% 120.5% Mar 5.0% 78.2% 137.2% Apr -2.6% -27.2% 117.3% May 5.3% 82.9% 128.5% Jun 3.5% 35.5% 132.1% Jul 4.8% 49.5% 137.6% Aug 27.7% 779.7% 190.9%
So even if by some miracle the year continues on the same steep slope (I won’t dare count on it and where am I going to find another KITE? Thanks Saul and all!) I still won’t double my investments this year as was my goal. But I did some investigating and discovered I’ve averaged somewhere north of 14% of my ports languishing in cash and earning zip over the last decade. Lately it looks to be averaging right around 17.5%. Not smart or not brave enough? I’m not sure. It’s hard to buy when prices seem to be ridiculously high. But you know . . . we do it and we will continue to do it. I should have used every dime of cash. Ah, the beauty of hindsight, but that was stupid.
Now all I hear these days is “Expect 4-5% returns maximum for the coming years BEFORE TAXES.” But those yahoos haven’t discovered the wonderful folk here in this little corner cafe yet. Sorry, Saul. Really, I mean this corner deli.
Are we having fun yet? What a year. But seriously I need some new companies. What do you folks recommend? If I were 35 again, I think I’d put it all on Red 13. Not really. But I might move to Canada and wait for the birth of Shopify. That’s going too far now, isn’t it. Yeah, I thought so.
Have a great long weekend and happy hunting,
things to do:
- Buy more SHOP
- Buy still more SHOP
- bread, milk, eggs, ribeye steaks
- Shorten monthly “reports”
- Trade Corvette for new Corvette
- Don’t tell Mom about #5, it’ll be a “surprise.”
- Buy flowers!
- See #1