Semester Report

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Focus, Focus, Focus.

That’s the name of my game. For the first 6 months of this year I’ve been concentrating my
ports down to just a few winners only. I’ve sold my solid but slow growing stocks and my
dividend payers, some that I’ve held for a few years.


Buy, Guy, Buy

I started out with over 50% in cash. Now I’m all in. So this is everything I own now and how it’s
doing, where:
• Size = Percent of Ports
• Days = Days Held
• Conv. = Conviction on a scale of 1-10, where 10 would be a sure thing (For the record,
I’ve never rated anything a 10.)
• EOYTG = EndOfYear Target Gain (set when I bought the stock this year, or 1/1/17,
whichever came last.
• EOYTP = EndOfYear Target Price, based on the beginning price plus the Target Gain
set earlier.
• TO Trgt = Distance from Target Price today (Negative = Past Target).
• CAGR = Capital Appreciation Gain Rate, Including if relevant, dividends.
• Alerts = Reminders to sell, so far ignored.

Ticker	Equity Name               	Prch Date	Size	Days	Conv*	Strategy       	EOYTG	    EOYTP	To Trgt	Gain %	CAGR   	Alerts                                       
AAPL	Apple Inc.                	05/20/15	4.0%	743	5	Watch Closely  	26.0%	   145.908 	(4.5%)	31.0 %	9.5%	¦  AAPL is past Target by 4.5%.
ALGN	Align Technology, Inc.    	05/10/17	7.2%	22	6	Watch Closely  	29.0%	  177.9684 	22.6%	5.2 %	138.2%	  
CSX	CSX Corporation           	04/13/15	2.3%	780	8	Buy On Dip     	35.0%	   48.8025 	(9.9%)	67.9 %	27.5%	¦  CSX is past Target by 9.9%.
CSX	CSX Corporation           	04/07/15	2.8%	786	8	Buy On Dip     	35.0%	   48.8025 	(9.9%)	67.3 %	27.0%	¦  CSX is past Target by 9.9%.
FB	Facebook, Inc.            	03/21/17	5.4%	72	8	Hold           	20.0%	   166.428 	9.9%	9.1 %	56.7%	
FB	Facebook, Inc.            	04/23/15	3.9%	770	8	Hold           	34.0%	  155.4802 	2.7%	82.2 %	33.0%	¦  FB is only 2.7% from Target.
GOOG	Alphabet Inc.             	03/21/17	5.5%	72	8	Hold           	25.0%	   1059.45 	9.8%	13.8 %	94.0%	
GOOG	Alphabet Inc.             	05/20/15	4.5%	743	8	Hold           	35.0%	 1051.3935 	9.0%	78.4 %	33.0%	
MA	Mastercard Incorporated   	02/21/17	6.4%	100	6	Hold           	17.0%	  127.9629 	4.1%	12.5 %	52.7%	¦  MA is only 4.1% from Target.
MELI	MercadoLibre, Inc.        	05/19/17	5.0%	13	5	Watch Closely  	27%	   369.062 	34.2%	(5.4 %)	-81.1%	  
MU	Micron Technology, Inc.   	05/11/17	10.9%	21	6	Watch Closely  	22.0%	    35.624 	15.8%	5.3 %	155.1%	  
PAYC	Paycom Software, Inc.     	05/22/17	3.4%	10	6	Watch Closely  	31%	   84.9797 	29.9%	0.8 %	35.9%	  
PYPL	PayPal Holdings, Inc.     	05/01/17	6.5%	31	7	Hold           	17.0%	    55.458 	6.2%	10.1 %	216.6%	  
SHOP	Shopify Inc.              	02/27/17	10.3%	94	8	Hold           	50.0%	    92.205 	0.4%	49.4 %	364.8%	¦  SHOP is only 0.4% from Target.
SWKS	Skyworks Solutions, Inc.  	05/01/17	6.5%	31	6	Watch Closely  	18.0%	   117.056 	10.0%	7.2 %	130.9%	  
VEEV	Veeva Systems Inc.        	05/10/17	11.2%	22	7	Hold           	16.0%	   64.2524 	1.1%	14.7 %	945.3%	 ¦  VEEV is only 1.1% from Target. 


Sell, Sell, Sell

Unless one of my holdings blows up, my sells include all the mistakes I’ve made, including
selling a pharma that I didn’t study enough to trust and went on to earn another 65% after I dumped
it… Following is everything I’ve sold this year, where:

• Bought = Purchase Date.
• Sold = Date Sold.
• Days = Days Held
• Real = Realized Gain/(Loss) %
• Since = Gain/(Loss) % since I sold out.
• Result = Good Call or Mistake.

Ticker	Equity Name                     	Bought  	Sold     	 Days 	Real	Real%	Since	Result
BIDU	Baidu, Inc.                     	02/14/17	03/13/17	    27	(5.5%)	(5.5%)	7.5%	Good Call
BWLD	Buffalo Wild Wings, Inc.        	05/22/15	02/17/17	   637	(0.4%)	(0.4%)	(8.6%)	Good Call
BWLD	Buffalo Wild Wings, Inc.        	04/14/15	02/17/17	   675	(14.2%)	(14.2%)	(8.6%)	Good Call
BWLD	Buffalo Wild Wings, Inc.        	05/22/15	02/17/17	   637	0.0%	0.0%	(8.6%)	Good Call
COP	ConocoPhillips                  	03/23/15	03/13/17	   721	(22.4%)	(22.4%)	(2.6%)	Good Call
CVX	Chevron Corporation             	03/23/15	03/10/17	   718	9.8%	9.8%	(4.3%)	Fair Call
DIS	Walt Disney Company (The)       	02/21/17	05/26/17	    94	(1.5%)	(1.5%)	(0.3%)	Good Call
ERDCF	Erdene Resources Development Inc	04/24/17	05/02/17	     8	(55.0%)	(55.0%)	#N/A	Good Call
ERDCF	Erdene Resources Development Inc	04/24/17	05/01/17	     7	(2.6%)	(2.6%)	#N/A	Good Call
EXAS	Exact Sciences Corporation      	03/16/17	03/29/17	    13	7.0%	7.0%	65.2%	Terrible Call
EXEL	Exelixis, Inc.                  	03/16/17	04/13/17	    28	(8.6%)	(8.6%)	(9.7%)	Good Call
FAST	Fastenal Company                	05/15/15	04/03/17	   689	25.2%	25.2%	(16.5%)	Bad Call
GLD	SPDR-GOLD TRUST                 	04/21/17	05/01/17	    10	(2.2%)	(2.2%)	1.0%	Good Call
GLDW	SPDR-LD GOLD TR                 	03/02/17	03/13/17	    11	(3.7%)	(3.7%)	0.1%	Good Call
ITA	ISHARS-US AEROS                 	02/28/17	03/29/17	    29	(4.0%)	(4.0%)	7.2%	Good Call
KITE	Kite Pharma, Inc.               	03/16/17	03/30/17	    14	(4.7%)	(4.7%)	(12.9%)	Good Call
KITE	Kite Pharma, Inc.               	03/16/17	04/03/17	    18	(0.3%)	(0.3%)	(12.9%)	Good Call
LGIH	LGI Homes, Inc.                 	03/16/17	05/02/17	    47	(1.2%)	(1.2%)	1.8%	Good Call
MIDD	The Middleby Corporation        	04/16/15	05/01/17	   746	32.1%	32.1%	(7.6%)	Good Call
NFLX	Netflix, Inc.                   	01/18/17	03/06/17	    47	(2.3%)	(2.3%)	15.7%	Bad Call
NVDA	NVIDIA Corporation              	01/23/17	03/13/17	    49	(4.1%)	(4.1%)	45.0%	Bad Call
SDS	PRO-ULSH S&P500                 	04/18/17	04/20/17	     2	7.0%	7.0%	(4.9%)	Good Call
SLV	ISHARS-SLVR TR                  	04/21/17	05/01/17	    10	(4.3%)	(4.3%)	0.7%	Good Call
UBNT	Ubiquiti Networks, Inc.         	05/02/17	05/09/17	     7	(9.9%)	(9.9%)	1.6%	Good Call
UNP	Union Pacific Corporation       	04/13/15	03/20/17	   707	(4.1%)	(4.1%)	5.5%	Good Call
UNP	Union Pacific Corporation       	03/23/15	03/20/17	   728	(0.4%)	(0.4%)	5.5%	Good Call
UNP	Union Pacific Corporation       	07/06/15	03/20/17	   623	12.3%	12.3%	5.5%	Good Call
WFC	Wells Fargo & Company           	02/21/17	04/05/17	    43	(5.9%)	(5.9%)	(8.4%)	Good Call
XLV	SPDR-HLTH CR                    	04/27/17	03/14/17	   -44	5.0%	5.0%	(0.1%)	Good Call


(self) Report Card

Overall, our ports are up an average of 19.3%. (All now have same holding percentages, but
port size and commissions and fees make a slight— from 1 to1.5% —difference in results.)
Not| bad considering what I started the year with, but not near where I want to be. Ill take …
maybe a B- in a good mood, otherwise C+.


Next! (Things left to do:)

• I mentioned before I’ve been developing a gigantic spreadsheet (actually a series of
spreadsheets) to run companies through to get reliable new candidates. It might have
worked too well. Starting with 700-800 potential “candidates” I now have too many finalists to
study in any depth at all but the heck of it is that all are going up in price like there’s no
tomorrow. I’ve had worse problems and I guess I’ll survive. But what a waste, and I
spent so many hours working out the details of the formulas to get there. It’s harder than
one would think to decide how to grade a company on hundreds of data points, even
after the data lands in your lap.
• I have cash left in one account where a buy limit order didn’t hit (tried for too many
shares, I guess?) and the orders in our other ports filled, evidently barely. Otherwise,
I’m all in; several ports are down to less than $100, something I’ve never had happen
before—in any port.
• I want to look into Manifest Investing, an online brokerage where you can build a port
with any percentages of any tickers once, and then buy and sell shares of everything at
any time for one commission. Managing ports for a some relatives, I’ve decided to keep them
all the same from now on to simply things considerably and this fee structure would save me/us
hundreds, maybe thousands, of dollars per year. Plus, you can buy fractional shares, kind of like
having your own mutual fund without the fees. It’s harder to squeeze a few shares of GOOG at $900
into a small IRA and keep it balanced than one might imagine. No problem with Manifest. Just have
some final questions to answer before the Big Switch. Like: do I have to sell everything < Gasp! >
to transfer?


How are YOU doing?

Hope you’re all having a good year, much better than mine. And Me? Well, investing wise I’m
… not satisfied, not yet, but remain happy. Why not?


Call me :slight_smile:

Any and all comments or advice, positive or (especially) negative, are appreciated. Truly appreciated.


Thanks!

A shout out to Saul; thanks for herding this board and keeping it focused. And to the posters
here. Amazing things can happen when we help each other learn. For me I think the
biggest thing I’ve learned to overcome, with this board’s input from everyone posting here,
is how to sell with zero emotion. If it ain’t working, file 13. Don’t think about it, don’t fret
over it, just get it out of the way. It’s not for everyone I’m sure, but right when I was searching
for more ways to focus my investing on higher gains, you folks came through for me. Big Time. So
thanks. Big time.

Dan

27 Likes

Nice one Dan - really liked some of the ways you’ve looked at the holdings as well as capturing strategic intentions and tracking the steps you’ve taken.

Things that struck me of interest:
In your sales list - most were literally held for days or years - quite an interesting short and long term combo.
Clearly you go along with one of the Gardner rule of buy high (which seems to be paying off for you)!
You’ve exited a lot and what you’ve bought doesn’t ever make it to conviction of 10 - obviously it would be even better to get to 11. But Google on only 8? Do you not want any 9s/10s or do you not judge anything that high?
What happens when you hit targets early do you sell or set new targets and how do you track old and new targets?
With you all the way on Micron, Paycom, SHOP and Meli. I rate ALIGN but always too expensive!
Not sure how I square exiting UBNT but keeping SWKS
I notice you not only make multiple buys (on the way up or as you free up cash) but you also make multiple sells (on the way down or stake rebalancing).

Thanks for posting and love the high energy conversational style of writing!
Ant

6 Likes

Thanks!
A shout out to Saul; thanks for herding this board and keeping it focused. And to the posters
here. Amazing things can happen when we help each other learn. For me I think the
biggest thing I’ve learned to overcome, with this board’s input from everyone posting here,
is how to sell with zero emotion. If it ain’t working, file 13. Don’t think about it, don’t fret
over it, just get it out of the way. It’s not for everyone I’m sure, but right when I was searching
for more ways to focus my investing on higher gains, you folks came through for me. Big Time. So
thanks. Big time.

Thanks to you Dan, for nice contributions, and for this interesting post. It sounds like you are really streamlining your portfolio and succeeding in getting rid of the dead wood without worrying if an occasional one of them goes up after you sell it. Great!

Saul

2 Likes

wow nice write up! Thanks for sharing. I learned a lot from your post. I am a newer investor that has a long way to go and you gave me some good ideas on tracking my positions and transactions.

1 Like

Dan,

Thanks for the great write up!
I wouldn’t beat yourself up too much for “only” being up 19.3% thru first 5 months of the year. That is an excellent return. and IMHO certainly better than a B-/C+.

Keep up the good work!

Kevin

1 Like

Greetings, ant,

Great questions; I’ll try to answer.

In your sales list - most were literally held for days or years - quite an interesting short and long term combo. Yes, this is the restructure period, re-focusing. Hopefully I won’t be getting rid of so many in the future, but no promises.

Clearly you go along with one of the Gardner rule of buy high (which seems to be paying off for you)! Yes, most of the spectacular gains I’ve missed have been due to refusal to pay a “high” price. Not this year, not at this time. I still think we’re in Goldilocks Market territory.

You’ve exited a lot and what you’ve bought doesn’t ever make it to conviction of 10 - obviously it would be even better to get to 11. But Google on only 8? Do you not want any 9s/10s or do you not judge anything that high? Correct. I’ve never had a 10. On NEW buys, I always leave the conviction rated low. This is spite of the fact that I have to believe pretty strongly in my thesis before buying. If it goes down 8-10% in short order, I want my eye on it. I can sell and re-enter later, or just admit that it might have been a mistake. Too many times I have had a new buy drop 25% while I wait for it to recover (requiring 33% to break even.) No more. “Avoid losing money” is what will make or break my strategy, assuming the market doesn’t throw a hissy fit.

You’ve exited a lot and what you’ve bought doesn’t ever make it to conviction of 10 - obviously it would be even better to get to 11. But Google on only 8? Do you not want any 9s/10s or do you not judge anything that high? See above. Plus, part of the conviction is also due to market forces. I don’t equate this market with “normal” at all, and I know it isn’t going to last forever. How long it does is anyone’s guess but I can’t see using a Buy and Forget policy right now. Everything is suspect. Or, I’m just being paranoid. :slight_smile: Facebook was recently a 9. It is actually a better buy than almost any of my other holdings right now. But after great gains, it too is becoming “suspect” although I hope to keep it for the foreseeable future. Maybe that makes no sense to others.

What happens when you hit targets early do you sell or set new targets and how do you track old and new targets? My plan was to sell and move to another fast grower. I really hate whacking a winning position though, so I’ve decided that what I will watch from here on out to the end of the year is CAGR. If it drops or especially becomes negative for a few months, < POOF! > I’m not here to be loyal to any company.

With you all the way on Micron, Paycom, SHOP and Meli. I rate ALIGN but always too expensive! I agree, and prior to this year, I would never have bought at the price I did. But I could say the same for almost all of my newer holdings. Again, it’s my theory of Goldilocks that lets me buy high.

Not sure how I square exiting UBNT but keeping SWKS Agreed. This came down to timing, an effort to become 100% invested. At the time I had fewer candidates than I do now. I like SWKS and have owned it before for quite a while, but I agree–I don’t like it that much. It is a likely candidate to be replaced sooner than average. I wish I would have kept UBNT, but it dropped quickly after I bought so it got tossed out for now.

I notice you not only make multiple buys (on the way up or as you free up cash) but you also make multiple sells (on the way down or stake rebalancing). Habit maybe. I used to buy in stages always, but lately not so much. Part of this is trying to balance multiple ports for multiple parties, all of greatly varying dollar values. It is a balancing act, and I don’t want the largest ports to swamp the little guys with purchases. (Not that any of them are big enough to sway the market in any meaningful way, but these small high flyers … are volatile some times.)

Thanks again for the great questions. I can tell you figured out that all of my strategies are apparent without too much need for reading between the lines. Again I emphasize that I do not consider this market “normal” and that affects my strategies and policies. Flexability-r-us. Or doubters would say “No Stable Plan>” :slight_smile: Actually, my goals are clear cut. But they are written in cyber bits, not stone, and by design are easily modified as I see fit.

Good luck, ant. If I become disabled for any length of time, I have a feeling you could easily run my ports for me and understand very well what I’m trying to do. Not that I would wish that on any friend.

Dan

2 Likes

Ant, you owe me one! :slight_smile:

Sheesh, I answered one question twice.

–Windy, aka Dan

Dan,
I’m interested in how you arrive at your level of conviction. Based on your post it seems like all your decisions are driven by stock price motion. Up is good, down is bad (unless you already sold, in which case the up/down trade places).

Do you look at earnings, revenue, moat, competitive landscape, customer concentration . . . You know, the actual underlying business?

I’m interested in how you arrive at your level of conviction.

Over time, Rock. If I had a conviction rate of 10 on a brand new stock, why am I just buying it now? Call me a coward, but I’m seldom real comfortable with a stock until I’ve had it awhile, seen how management reacts to certain situations, etc.

Based on your post it seems like all your decisions are driven by stock price motion. Up is good, down is bad (unless you already sold, in which case the up/down trade places).

I have no idea how you came to the conclusion, so I don’t know what answer you’re looking for. After all, I don’t believe my conviction ratings flow in parallel with any of my holdings’ returns, or if they do, it’s coincidence. That said, it’s easier to ride out a storm with a holding that’s up 100% than one that’s down 25%, wouldn’t you agree? And, being up 100% would not make that a 10 rating in my book anyway. Maybe it doesn’t deserve a 100% gain. Maybe it’s over-shooting its logical price by 80%. Or maybe I calculate that it’s under-priced by 50% even though I haven’t made dime yet. I’d surely hold that “loser” because of my conviction.

Did you notice that Apple was my lowest rated stock? If you’re really interested, you should have. I’m writing Limit Sell orders for all the Apple in all our portfolios as I type this. Personally, I think it’s over-priced, and I suspect it may take a tumble any day now. And if it doesn’t? No, I don’t care at all, except … I’m not satisfied with a stock that I’ve held for 740 days that’s only producing a 10% return, especially when I think 10% of my gains are due to the market’s mis-pricing of the stock. If I hold and it goes down more than 22.4% for any reason (and I think it’s priced for a level of perfection which is all but unattainable) I’m back to zip after holding for 2 years! Do you think that promote conviction? Not for me, my friend, not for me.

I keeping track of all former holdings, especially this year. I don’t care what they do price-wise individually, I care that I learn something from having owned the stock, and that includes what it does in the several months following my decision to sell. If it goes to zero, did I “win”? Well, kind of, but it sure would make me wonder what was wrong with my thesis when I bought! If all of an investor’s sold equities appreciate 40 or 50% in the year after he sold, all I can say is that he had better be making a lot more than 40 or 50% in the stocks he replaced his sells with. And if he issn’t, he should try to learn something about why this is happening, don’t you agree? It seems simple and intuitive to me, but maybe I’m wrong.

Have I ever whizzed & moaned about a stock taking off for outer space after I sold it? Sure, who hasn’t? But to me that situation is only capable of 2 positive outcomes. 1) Humor–these stories are hilarious. How many times have I told you and the world about being the only loser owning NFLX shares? :slight_smile: and 2) to learn whether my reasons for deciding to sell are consistent (good or bad) or leaning more toward randomness and chaos.

So do I only care about price? Heck, that would be foolish. But to ignore price might be rather foolish too. Sorry, what we we discussing? :slight_smile: If you don’t care about price (or caring about price is wrong as you seem to imply(?), then you and I are investing for different reasons, which is fine, but not knowing what your particular investing non-profit motives are, I am at a total loss to continue this discussion.

Sorry, I guess I don’t understand your point. Please feel free to expand your thought. First, a question: If a stock doesn’t have considerable price appreciation, unless it’s paying nice dividends, what else makes it a “good company”? If you’re thinking of charity, or green, or glass ceiling scenarios, or best-employer-of-year situations, sure, I admire them. But I can’t afford to buy “cool” companies that aren’t working to increase my wealth. And if I could, I would not. I would rather have a higher-returning company working to make even more money, and pick my own donation-worthy groups to share the extra gains with.

I suspect I’m missing something important, so until I am spoon-fed more info, I’ve got some apples to sell.

Dan

2 Likes