Saul’s Portfolio at the end of June.
As I wrote last month I fell and broke my arm a month and a half ago and required major surgery with the insertion of a titanium plaque to hold the pieces of bone back together. I did a very abbreviated post at the end of last month. I’m still far from back to normal but will try to add some more analysis this month.
MY RESULTS MONTH BY MONTH FOR 2023
Here’s a table of the monthly year-to-date progress of my portfolio for 2023. I’ll present them as starting from 100% of my starting value and figure from there:
End of Dec 100.0% starting point End of Jan 109.7% End of Feb 107.0% End of Mar 105.8% End of Apr 91.9% End of May 106.3% End of Jun 119.0% End of Jul 127.5%
To go back , in April two of my largest positions at the time, Enphase and Cloudflare, each dropped 25% after earnings, which explained my portfolio’s 13% drop in April. I exited Cloudflare but didn’t have the sense (or I had too much hope) to exit Enphase. While I did reduce it, not exiting was a very expensive mistake, as its stock price kept dropping while the rest of my portfolio rose by quite a lot (see below), so there was a real opportunity cost. Redeploying the money from a sinking company to a company that rose would have made a considerable difference.
You’ll note that my portfolio rebounded in the three months after April (May, June, July) by almost 39%. For comparison, the S&P rose a little less than 10% in that time. That sure was a better comparison than the horrible ones I lived through in 2022. And there are numerous others on the board who have done even better than me.
Here’s what my postions looked like a month ago (end of June).
Samsara 17.0% Aehr Testing 15.5% Monday 15.0% Global-e 13.5% The Trade Desk 11.9% Enphase 9.6% Bill 8.5% Tesla 5.4% Snowflake 2.2% Zscaler 0.5%
And here’s what they look like NOW, at the end of July:
Aehr Testing 18.4% Samsara 15.9% Monday 15.0% Global-e 13.5% The Trade Desk 13.2% Bill 8.7% Tesla 5.1% Axon 3.6% Enphase 3.4% Pure Storage 2.5%
Out of the ten positions that I had at the end of Jun I have only closed the two smallest, Snowflake and Zscaler. Zscaler was almost gone already at the end of June, at 0.5%. So I don’t have any more security companies. Why? Well sure, security will always be a need, but their rates of growth plummeted beyond our expectations, and there just seems to be too much competition, and growing.
And why not keep the little Snowflake position? Well, it seemed that even their CFO couldn’t guess what the next quarter would bring, and I thought I’d try elsewhere.
I had already trimmed Enphase small amounts on several occasions, and then on Friday I trimmed more than half of what was left. I’ll undoubtedly trim more next week, but I may keep one or two percent, just on the theory that the revenue growth estimate may be wild sandbagging, just so they will have something positive to say next quarter.
To replace Zscaler and Snowflake, I took small positions in Pure and Axon, both based on discussions on the board. I’m not sure if I’ll keep them yet.
Then there is my small position in Tesla. I have not been able to bring myself to build it up into a larger position, in spite of them taking over electric car charging for the whole world (or so it seems). Why not? First of all, I don’t own a Tesla (in my opinion, ownership of one or more of those cars seems to make the owner give up all rational thinking about the value of the company. ) Secondly I have serious doubts about the CEO, who, inspite of his obvious genius, seems to make wild, irrational detours fairly frequently. Thirdly, it’s a hardware company, and finally, its stock is already very highly priced.
I haven’t taken a position in Enovix yet for reasons I mention.
Now to my top position, Aehr Testing. I did add small amounts now and then, but not enough to push the position size up the way it has grown. The position size has risen the way it has because the stock price has continued to rise, rise, and rise.
I took my initial position three months ago, in about the last week of April, at about $24.80. Since it is now at $50.24, you can see that it is up 100% since then. And the great business numbers are yet to come!
(Some of my friends sell when the price goes up, thinking they can guess the top. I tend to buy more as I see the price rise as a verification. Both methods have their advantages. I’m sure though that I won’t let my position size get over 25%, as a position size that large generally means that I have turned off my critical faculties, and it usually ends badly.)
I hope that these discussions were helpful.
And here’s a copy my my X-Ray. That very white structure is what they had to stick in my arm.
I have kept a permanent safety fund out of the market that I could live off for several years if necessary, and I feel everyone who does not have a secure regular source of income should do the same.
I have learned long ago that sticking with great companies wins out in the end, and beats market timing, but living through this decline has been difficult.
Let me remind you first, that I have NO IDEA what our stocks will do next month. I’m terrible on predictions. But I know that the businesses of our companies will do just fine for the most part.
When I take a regular position in a stock, it’s always with the idea of holding it indefinitely, or as long as circumstances seem appropriate, and never with a price goal or with the idea of trying to make a few points and selling. I do, of course, eventually exit. Sometimes it’s after months, and sometimes after years, but I’m talking about what my intention is when I buy.
I do sometimes take a tiny position in a company to put it on my radar and get me to learn more about it. I’m not trying to trade it and make money on it, I’m just trying to decide if I want to keep it long term. If I later do decide that it’s not what I want, I sell it without hesitation, and I really don’t care whether I gain a dollar or lose one. I just sell out to put the money somewhere better. If I decide to keep it, I add to my position and build it into a regular position.
You should never try to just follow what I’m doing without making up your own mind about a stock . First of all, you may have a completely different financial picture than I have. Different age, different income, different assets, different debts, different expenses, different financial and family responsibilities, etc.
Besides, in these monthly summaries I’m giving you a static picture of where I am currently, but I may change my mind about a position during the month. In fact, I not infrequently do, and I make changes in the position. I usually don’t announce these changes until the end of the month, and if I’m busy or have some personal emergency I might not announce them even then. And besides, I sometimes make mistakes, even big ones! Don’t just follow me blindly! I’m an old guy and won’t be around forever. The key is to learn how to do this for yourself.
Since I began in 1989, my entire portfolio has grown enormously. If you are new to the board and want to find out how I did it, and how you can try to do it yourself, I’d suggest you read the Knowledgebase , which is a compilation of my “words of wisdom”, and definitely worth reading (a couple of times) if you haven’t yet. It’s on the panel to your right.
I hope this has been helpful.