As always, I first want to bow to the court of Investment Kings. There are just SO MANY super smart folks contributing to the boards on Motley Fool. Without the selfless and untiring help of this community I would not be where I am. Still beginning, but beginning based on knowledge provided by this community.
End of May 2018 is considered my starting point. Thus, this is my first monthly update for performance and changes.
My goal for June was to consolidate from 17 stocks down to 10-12. I want a smaller number so that I can track and keep up with the companies. Very difficult to cut down to such a small number. At 17, I felt they were all good companies… but I REALLY wanted a smaller focused portfolio. Note: this portfolio represents less that 5% of my investments and less than 2% of my retirement holdings. Thus, a converged portfolio does not represent as much of an integrated risk for me.
Sells… I sold all shares of 5 positions: IBKR, ILMN, ADBE, ANET, OKTA.
IBKR, I just didn’t believe in it. I’ve chosen not to use IBKR… because I prefer TDAmeritrade and Schwab… even though their commissions are the lowest. If I’m not giving them my business, why should I be investing in the stock?.. Thus I sold.
ILMN, I believe genetics is an obvious growing field and their company is doing great. This one was difficult, but I felt their were higher growth rate better investments to choose from amongst the 17.
OKTA, I know this is a Saul Pick… and many folks are excited about it. Their recent quarterly report was outstanding. There’s nothing to complain about… but single sign on for companies just doesn’t have much of a moat in my opinion. It’s PS/PE ratios are already VERY high… I just feel this stock is ahead of itself and I wasn’t comfortable with it. Might not be a popular pick, but I was not comfortable with it. In the end, that’s what matters.
ANET: I feel ANET is a phenomenal company… But… it’s been super frothy bouncing around between 240-280… I feel like it needs to catch up with itself some as well. If ANET dips below 240, I’d buy some back.
ADBE: This one killed me. I agonized over selling it… but at over $120B market cap I just felt others had more upside. Similar to ANET. I’ll look to buy this one back on significant dips.
Cash
End of May 2018 Starting Point 40.0%. End of June update 24.88%.
Tier 1 Stocks: 42.9% of my total portfolio: High Conviction
PSTG: 6.5%
MDB: 6.3%
PVTL: 7.6%
SHOP: 5.6%
SQ: 6.2%
VRNS: 6.2%
NVDA: Doubled position size, now 4.6%
Tier 2 Stocks: 10.2% of my total portfolio: Moderate Conviction
COUP: Quadrupled position size, now 6.0%
AYX: Doubled position size, now 5.9%
NTNX: Doubled position size, now 4.0%
TLND: Doubled position size, now 5.4%
TWLO: Doubled position size, now 4.3%
Tier 3 Stocks: 7.5% of my total portfolio: Low Conviction
NKTR: 7.5%
Overall June was a fairly bloody month… but with all the volatility, pops and drops, after subtracting out cash contribution and options related gains/losses overall I had a -0.57% loss for stocks only. Given the massive drops in June, I actually feel fortunate that I only was down -0.57%. Several stocks popped up nicely on good earnings reports… but overall everything got hammered on fear of Tariff Wars with China and others. Ignoring these FUD related news, I didn’t see anything that changed the thesis on any of these stocks. Therefore, I’ll hold.
Note: In respecting Saul’s request for not discussing options here, I’ve omitted Options related gains/losses and discussion thereof.
While watching the great gains from early in the month evaporate later in the month, I’m pleased overall… not with -0.57% return for the month, but pleased that I stayed calm through the chaos of the month. I’m not lamenting the fact that I sold/bought before the chaos… I made the decision to consolidate and did so. I feel I made good progress in watching the volatility and not freaking out. Focusing on the thesis and whether or not that’s changing seems far more helpful than watching the stock price change. I feel that’s a good lesson in itself.
Thanks
Mark