What a gut punch. Admittedly, at least mostly self-inflicted. At open on Monday I was up roughly 12% on the month, and I ended up, 4 days later, down 3.8% on the month due to TMDX and SMCI. An incredible drop which makes the 4th straight month of horrendous drops that have erased otherwise positive performance from my portfolio. On the year, I’m still doing great overall, but I’d have to call myself a fool (pun intended) if I didn’t do some self evaluation on the last few months as I’ve made some massive mistakes.
Two things I’ve realized in self-reflecting over the last few days. #1 - I am a chronic optimist to a fault. This has led to some positive and some negatives, but I need to start hedging against my own optimism a lot more. And #2, I tend to need to learn hard lessons first hand. It’s almost masochistic at this stage! That 1/2 punch turned into a gut punch over the last few days and ultimately months.
I’m pretty new to this and I’m also starting to learn that my focus on the numbers, and particularly the EV/Sales valuation metric, may be misguided. While it led to some major successes especially with SMCI, I’m beginning to learn maybe there is a red flag reason behind the low valuation that I need to take much more seriously. Obviously that’s the case with SMCI. But some of my other companies with low valuation may have similar warning flags, such as dilution or other factors I’ve yet to learn/comprehend. I’ve also made the choice to sell out of positions due to valuations (and also slowing growth metrics), only to see those companies take off in share price (Axon, IOT), so clearly I don’t understand how the market assigns valuation very well. I’m not sure yet how I’ll tweak my approach, but it likely needs tweaking.
November will be telling as my companies have earnings in 9 out of 10 days starting Monday.
Here are my results to date:
JAN: +11.38%
FEB: +19.98%
MAR: +3.37%
APR: -7.07%
MAY: +15.18%
JUN: +7.13%
JUL: +0.19%
AUG: -3.43%
SEP: -2.32%
OCT: -3.8%
YTD: +55.77%
Here’s my updated portfolio:
Company Results/Decisions
What I Sold Out Of
TSLA: I sold out after the Cybercab event with a gain, so I am happy. This is COMPLETELY contradictory given some of my other investments, but I just do not trust what Elon has to say. I hope to apply this to all my stocks, prioritizing listening to the earnings calls and listening to the tone of the leadership. I’m happy for all of the board members that held through their earnings and got the big rebound. I figure there is plenty more time to get back in, and I imagine there will be more deadlines missed and big share price declines to be bought, as well, if I change my mind.
Current Positions:
NVDA: +9.8% MoM
Nvidia began to rebound during this month after Blackwell news began to trickle out and news started to trend positive. Ultimately I believe they hit a new all time high, and I got uncomfortable with a 33% position, so I trimmed it back to 25% about 10 days ago to help beef up some of my smaller positions, primarily.
PGY: +8% MoM
I was hoping for a bigger movement this month as the pain of the last capital raise wore off and macro numbers continue to point towards rate cuts, but I suppose I should be happy with 8%. They announced another acquisition (Tally Technologies, a debt consolidation company) and completed their acquisition of Theorem Technologies. I’m hoping this explains the capital raises, and that they can put those behind them. Looking forward to earnings on 11/12. Did not touch it in October.
UPST: +22%
Upstart saw a bigger upswing than PGY. In October they made a big loan acquisition deal with Blue Owl capital, got an upgrade from Wedbush, and announced a new product aimed at “Super Prime” borrowers. I’m hoping all of this - plus rate cuts - adds up to a beat and raise during earnings on Thursday next week. But I have been trying to keep them below 10% until they prove they are rebounding, so I trimmed a bit during October. Earnings Thursday 11/7
ALAB: +35%
Astera was a primary beneficiary of my NVDA trim and my big TMDX reallocation, as I looked more closely at the impressive numbers. They are also innovating with new switches announced earlier this month…I don’t know anything about the technology but I’m excited about their prospects as a player in the AI Wave. Earnings Monday 11/4.
NU: +10%
I sold some of my NU early in the month as I was looking to beef up some of my smaller positions, as I was gaining in confidence about them. It’s always a struggle to choose what to trim, and I did not make the right choice here, given what happened to SMCI and TMDX. Earnings 11/13
NTRA: -5%
I continue to add to Natera as they are one of the most impressive companies I hold in terms of accelerating growth rate, margins, net income, etc. They’ve been very consistent and I’m hoping it pays off when they report next Friday, 11/8.
SMCI: -30.7%
Forget getting delisted from the Nasdaq, SMCI might need to get delisted from Saul’s board! It was up around 20% before the latest fiasco, and I thought maybe my roulette spin would pay off. I was very wrong. Too optimistic, and too willing to pay the price to learn the lesson. I don’t want to discuss it much more as it’s totally off topic for this board at this point. But I’m waiting until they report on 11/5 before I sell out (and I know, I’m paying the price)
IMMR: -5%
Immersion is a really small company and their revenue has taken off the last couple of quarters, in an almost suspicious way (1300%). However I’ve read a couple articles that suggest that despite having their technology in over 3B(!) devices worldwide, they have only recently updated some key licensing agreements in order to benefit from it. They have woefully bad investor relations, and only 14 total employees according to Robinhood. I chose to beef it up in the hopes that the revenue trend continues when they report next, date TBD but estimated as 11/14 on Koyfin.
RDDT: +8% Since My Purchase
I started a position in Reddit after trimming TMDX and reading WPRs post on earnings. I know a lot about Reddit due to my day job in advertising, however I didn’t want to invest until I saw numbers for a few quarters, as I’ve been burned on other advertising stocks like Pinterest before. The latest report was enough. Reddit has been getting a lot of attention on the advertising, in a strange way in the sense that even clients (brands) are bringing it up quite often. I think brands are intrigued because it gives them the license to be more playful, leaning into Reddit’s quirky culture of subreddits. It’s also got all the benefits of social media (reach + targetability), but it isn’t governed by an inherently sketchy algorithm. Rather, it has wholesome subreddits and very unwholesome ones, all that you can choose to be on or not. It also has a highly engaged, helpful and creative sales/marketing staff, which Meta does not have (but TikTok does).
What makes me excited though is that currently it is more of a test and learn playground and less of a consistent, tried and true partner. I think that the growth rate shows that more brands are starting to see it as a proven partner, and if they can introduce new ad tools, measurement solutions, etc. they could have a longer runway than seems possible. So I was willing to get in after the huge earnings bump.
TMDX: -47%
The first horseman of this week’s apocalypse. Despite the wisdom & warning of Saul, this report took me incredibly off-guard, and I have to say that I am still a little perplexed by it all, despite it being obvious to others. I agree with some that for me it was a thesis-shattering quarter, or maybe my thesis was just plain wrong in the first place and there was something I did not understand. Here was my understanding: “Paradigm-shifting organ technology that supplants outdated “technology” (coolers), while expanding the market of available organs, with plenty of market to take.”
This quarter certainly broke the first part of the equation which was that it would, quarter over quarter, supplant the old technology. They apparently took negligible market share last quarter. It felt like part of the plane strategy was so that they could continue to take market share, so maybe the fact that half the planes were down had a bigger impact than it seemed.
Then the whole “organ market is down in Q3” was even confusing to me, almost as if these are elective surgeries and we have enough “cooler supply” to meet the demand. I’m inclined to agree with StockNovice in that there is something about this process I just don’t quite understand and have visibility to, like a lack of surgeons that will curb growth no matter what happens.
Then finally, if the thesis is shattered, how are they still so confident they are going to get to 10k organs in a few years? They mentioned some new announcements coming in 2025 so maybe these are total game changers. I held a small position because I thought it was oversold, the reiteration of the 10k target and potential reveal of 2025 plans. At the time of earnings, it was around 17% of my portfolio, and I took it down to 2.8% in the days after.
SOWG: -20%
I had kept SowGood small and untouched as a pure tryout position until two days ago they outlined their strong demand and plans for growth in this press release: Sow Good Inc. Builds on Steady Innovation Pipeline with.
Good enough for me to bump it up a tad before earnings on 11/14.
ASPN: -36%
I added after reading a lot of the commentary from the board with the potential for the other OEMs to ramp, and then more after the loan approval for the Georgia plant, but then I trimmed back after the capital raise, and now it’s my smallest position as it’s been crushed since then. The pre-earnings weren’t really great with sequentially flat revenue. So I want to see guidance and comments on the future from leadership during earnings on 11/6.
Wrapping Up
I’m certainly beaten down and questioning my methods but I suppose it’s also important that I remember that these monthly updates are arbitrary moments in time. I’ve made some very well-timed sales at highs this year that have helped me pay for life improvements, which is the goal. I’ve hit some big highs before the big pullbacks, which I suppose is the nature of my risky style. But it could have been a lot better these last few months, and I need to learn to curb my faults if I’m going to grow this portfolio into a life changing sum. Hopefully this upcoming slew of earnings reports helps get me back on track.