Portfolio Update 8/29/20
It’s been right at a month since I posted my July portfolio update found here;
I have found doing these updates is helping me keep better records of my investing thought processes over time. Much like keeping a journal in life when you re-read in the future it helps you remember what your thoughts were at the time of writing. Hopefully others find this helpful as well.
Current Portfolio as of 8/29/20. Change since 7/29/20 +9.5% YTD +137.3%. YTD S&P 500 +7.85% Nasdaq +29.56% Dow -0.16% Stock Current % of Port % Change Market % of Port on 7/29 in port since 7/29 Cap ZM 23.7 21.8 +1.9 84.7B CRWD 21.3 16.3 +5.0 25.7B DDOG 16.2 11.3 +4.9 25.0B NET 4.6 0 +4.6 12.6B TCNNF 4.5 0 +4.5 2.6B BPRMF 4.1 3.1 +1.0 1.9B CASH 25.6 28.7 -3.1 AYX 0.1 5.9 -5.8 LVGO 0 12.9 -12.9
New positions since last portfolio update: TCNNF, ETSY, NET
Exited positions since last update: ETSY; AYX is very minimal
Trades between 7/29-8/29 Bought: CRWD 8/5 114.79 TCNNF 8/5 18.51; 18.50 DDOG 8/6 77.50; 77.60 NET 8/10 40.10; 40.09; 37.19; 37.17 TCNNF 8/12 22.61 ETSY 8/7 135.25; 135.30; 135.40 TCNNF 8/24 20.30 Sold: LVGO 8/5 136.08; 135.38; 135.35; 135.34 AYX 8/6 135.75; 134.75 ETSY 8/24 130.50
Thoughts on trades and companies for the month.
Another month of my cash position decreasing slightly, mostly because of general appreciation of my stocks. My cash position is as large as my entire portfolio value just two years ago. It is quite a bit of cash on sidelines. However I do not see many opportunities with current valuations. I will wait and be patient.
I sold almost entirely out of AYX this month. Only reason I kept some was because I have very small amounts of money with an extremely long time horizon in two accounts. AYX will be fine in long run, but for next few months in my opinion it is dead money. I sold after hours the day of earnings. Today it looks like a great move as the stock has fallen since then the last few weeks. I do not know for sure, but I believe it will continue to fall over next few months. I would be buyer under $100 a share.
There was lots of selling and buying in my portfolio this month, one of the biggest reason was I sold my positions in LVGO and AYX. When Saul posted on his thoughts of “why would management sell LVGO” I agreed with his logic that it did not add up. So I sold my shares for a very high YTD return. Since then I think many posters have brought up really interesting points, especially about how the founder wanted to pursue more humanitarian opportunities. I believe it is possible that he sold the company so he could change his pursuits. I may buy in at some at later date but I may not as well. I am a bit on the fence.
I took my AYX and LVGO proceeds and bought more CRWD, DDOG, ETSY, NET and TCNNF. I have owned CRWD and DDOG for at least six months. I have previously owned TCNNF this year and sold it. I sold out of ETSY this month. After starting a position and researching more about the company and I just think it’s not that special. I am not saying it is not a good company, it is just not an amazing company. I am trying to be a ruthless allocator of capital and less than amazing is not for me.
ZM appreciated on its own again this month, I did not add any new money to it. It is my largest holding. I thought about putting a sell order in for over $300 which it got over yesterday. However I have a lot of cash on sidelines and that fact gives me the strength to allow my winners to run. Earnings are next week, so I had an internal battle to take some profits but I really think they may surprise to the upside.
TCNNF I posted a pretty kick ass summary of the company back in February, the post got deleted. It is a cannabis stock. I get it you gotta have rules to maintain a healthy board. I later mentioned I sold my position because of some religious convictions and a friend of mine died which I thought may have been due to his THC wax use. Since that post I realized my friend died of Covid (and double pneumonia) and I watched my aunt die of cancer. She used medical marijuana and it relieved her at times in her last days. I decided for me it is a benefit to some folks and worthy of my investment dollars. I personally know some of the founders of this company. It has 50% of the Florida business and is growing revenues and profits rapidly. The stock has been on fire, I will leave it at that.
Blue Prism and Trulieve are both OTC stocks. That means they both do NOT have a lot of volume and are a bit more volatile. Thanks to Ethan for bring Blue Prism to the board. It is up pretty significantly since I bought it. I have not added but I do not plan to sell. One thing I do not like is earnings every six months. I am not that patient and you have to wait that much longer to gain understanding on company performance. I do believe Blue Prism is a potentially special company. Here is a recent announcement for an award they one for third year in a row for RPA https://www.prnewswire.com/news-releases/blue-prism-named-be…
I have been reading all of the FSLY posts. I honestly will say I do not understand the technology. However something about the company is not passing my smell test or at least the huge run up on price recently. I probably am completely wrong but I cannot get behind it. At the same time I like what I read on NET. I got into it because of the board and the posts that I read on here. Just seems to me to most likely to be winner. Again do not go on my word because I am not techie. I will say it made me feel even better about buying NET to read Saul’s monthly review and see where he reduced his FSLY to add to NET.
Stocks that I am considering taking a position in near future LVGO or TDOC. This would be a repeat as I sold out earlier this month. I also would consider adding to my TCNNF position. Depending on what happens with CRWD and ZM earnings report I will have my cash reserves ready. If they report what I believe to be great earnings and the stock falls, I will be ready. I also would consider adding to NET as I learn more about company. Hopefully someone will bring some research on a new company to the boards that I deem a good opportunity. I will not be selling any stocks to add to my cash positon as I am about to receive an inheritance from my recently deceased aunt. This will raise the amount of my cash in my portfolio in near future.
Number 1 holding ZM 23.7% To say this companies growth trajectory is straight up, probably an understatement. They are about to report earnings. I believe they will show ~250% yoy growth. I am on more Zoom meetings than every before. When I use other video conferencing software it does not work as well and I wonder why are we not using Zoom? As Covid continues, so will ZM meetings.
Number 2 holding CRWD 21.3%. Killed its last earnings report again. About to report earnings again. I believe it will produce good results again. Why do I like this company? Low touch sales model. This company was made for these times. It has been brought up on the board that CRWD already had a work from home culture BEFORE Covid-19.
Now Number 3 holding DDOG 16.2% Reported 68% yoy revenue growth in spite of Covid and the market wanted to punish it. I bought. I am not a techie, but it seems to have an easy to use product that is in demand.
New Position Number 4 NET 4.6%. Got into it because of board. Seems edge computing is future. I like the fact its once standard price instead of FSLY usage price. I think that in long run that will attract more customers. I will admit I do not understand this technology or market. This would be a candidate for sale if I had better opportunity.
New Position Number 5 TCNNF 4.5%. Medical marijuana grower and distributor. Owns 50% of the Florida market and building a brand. Growth revenues ~100% yoy. Business cash flows positive. Going to be a player in future while other Cannabis companies go out of business.
Now Number 6 BPRMF 4.1%. Hired a bunch of people the last two years. Hidden reaccelerating of revenues due to Covid. Technology that saves its customers money immediately, should be in demand even if economy downturns.
I have been following these boards for around five years I believe. I first read Saul on another board. He was calling out people for hanging on to a “story” stock. A stock that did not have the numbers to back its “story”. My first impression was who is this arrogant guy Saul. At the same time what he was saying made sense to me. He was very logical in his analysis of the numbers. So I came over to his board. I tried to invest in some of the companies he was invested in by the time I analyzed them enought to feel comfortable to buy, he would be selling them based on new information from earnings report, he seemly moved so quick I was not accustomed to his style. I continued to study his board and the other posters that would post there.
Fast forward five years. I feel I am a much better investor today from the time I spend reading this board. I am continuing my journey to be a ruthless allocator of capital. I do not want a story stock. Its funny because I read Saul’s latest monthly report. He sold AYX and invested in CRWD, DDOG, ZM and NET this past month. I also sold AYX and invested in 3 of the 4 stocks. I did not invest in ZM because I own so much of it already. I really try and learn from those whom have experience, I believe that is happening. Thanks to Saul and many of you that post regularly, which is helping me in my quest to be a better investor!!
As always any suggestions or questions on portfolio structure feel free to email me. Any questions on why I like or dislike certain companies post it to the board with exception of TCNNF (just email me on that one).