Praviner's October-2020 Month End Update

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Dear Fellow Fools

Please find below my October 2020 Month end update (of many more to follow). Sincere thanks for the board members for having made a difference in my portfolio and thanks to the forum I am now addicted to the process of investing for life.
Portfolio:

Company %
ZM 28.6%
DOCU 21.1%
LVGO 14.5%
CRWD 12.8%
DDOG 9.4%
PTON 9.1%
TDOC 4.5%

FSLY:

Much has been said about FSLY. I sold FSLY due to 1) Lack of trust in newbie CEO Joshua Bixby 2) Anemic growth of Enterprise clients. I took the proceeds from FSLY and initiated PTON. I am expecting fireworks from Peloton next couple of quarters as holiday season is upon us. I understand that their products are back ordered for several weeks and so we should see no dearth in demand. I am awaiting quarterly results anxiously. I wrote about my reasons for my PTON purchase recently in a separate FSLY thread.

ZM:

I expect great things from Zoom at least for the next few quarters. Super Impressed with Zoomtopia so far and cannot wait for ZM to become 1T company.

DOCU:

Love this company especially. In my day job I work in integrating DOCU with my company’s workflow. It is getting tightly coupled with the internal business workflow. I highly doubt any competitor is going to replace DOCU that easily since once the hard work of setting up E-Signatures is done, what is the additional X-Factor that a competitor is going to provide except let’s say that competitor gives out their product basically for free. Even then several hours have to be spent in modifying the code to again setup the new E-Signature product. This which will be arduous and business will hate it (DOCU competitor) since there is no value addition expect cost savings.

LVGO:

I setup a position in LVGO fairly recently and so my gain here is unlike (lesser than) others in our forum. Waiting for Nov-4 for seeing them migrate to TDOC & see some cash deposited. I wish I got in early. I frequently enter positions a little late and this is something I am working on since I tend to lose the initial growth spurt in the company.

CRWD:

I have a full position in CRWD and nothing much to add to CRWD. I hope the results come out well or we will have a drastic decline in our hands.

DDOG:

Just like LVGO I initiated DDOG fairly recently and my gains are very modest to say the least. In it for the long term and hope they had a good quarter. I am excited with the recent Azure integration & FED-Ramp certification.

PTON:

Every day I work out my thought always goes back to Peloton for the critical product they are delivering. I initiated this position based on the proceeds from FSLY sales.

TDOC:

I sincerely believe that TDOC becomes the juggernaut I hope it will become after their LVGO merger.

Notes:

I am planning to add to PTON and/or TDOC to take advantage of the current discounted prices. I am tempted to add SNOW but am not able to bring myself to do it due to the high multiples.

I plan to add to my existing positions since adding a new company brings in additional work like reading their quarterly/annual reports, conference calls etc. If my current positions are doing well, I prefer adding to them & averaging up.

Watchlist:

I am interested in the following companies (not exhaustive)

  1. Root
  2. Lemonade
  3. Asana
  4. AYX
  5. EXPI
  6. NCNO

Thanks,
Praviner

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Nice watch list.

  1. Root
  2. Lemonade
  3. Asana
  4. AYX
  5. EXPI
  6. NCNO

Here are my notes. I would love to hear more from others on these companies.

LMND is one company I was looking at. The growth is strong, but they have issues with margins and I have read that their costs are out of line with industry averages? I am not knowledgeable enough about the insurance industry to make an accurate assessment here. But, I do like disruptors using AI to shake up finance. This theme is one that I like to invest in.

ASAN is another company I was looking at. We use this are my work and the team loves it. All their revenue is ARR and it’s growing fast, but not as fast as ZM or SNOW. I think the product and value prop is easy for investors to understand, which is great. But the losses here are massive. And they have lots of competitors, I am worried this is another SMART?

NCNO I looked at this and ultimately passed. I think the banking industry moves too slow. I also think the TAM is much smaller than they claim. Regional banks will continue to merge and decline. But I could still be wrong about this? I would love to hear what you think?

AYX I held this for a bit and sold. I don’t plan to get back in. I think there are a lot of competitors that offer bits and pieces and will chip away at them from all sides. The product isn’t cloud-native and the pandemic hurt sales. All red flags for me.

I have no opinion on these two. But will take a look.
ROOT
EXPI

Thanks,
Golf Caddy 4 Peter Lynch

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NCNO I looked at this and ultimately passed. I think the banking industry moves too slow. I also think the TAM is much smaller than they claim. Regional banks will continue to merge and decline. But I could still be wrong about this? I would love to hear what you think?

Banks merge like rabbits have kits but it can take a year or more to merge different software (my experience when two regional banks, one of which I use, merged). I view NCNO as a merger tool; as banks size each other up, they will first migrate to the same software and then push the button to merge and combine the software. It will accelerate trends already in the banking industry.

My 2 cents (shortage of pennies these days)
Brian

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