Stock Portfolio September

This is my portfolio as of 9/9/2018. Here is a link to my last portfolio post which was almost exactly one month ago.
I do not usually post my portfolio on regular intervals like many do at the end of the month. It is because I am not an old guy! I am an owner/operator for five businesses and I am a husband with two teenagers. One day I will spend all my mornings of the week researching stocks and drinking coffee (hopefully on the beach somewhere) which I truely enjoy.

I was going to chime in on the raging discussion of risky momentum investing. It really comes down to this for me personally. Saul and the others on this board back their side of the argument up every month in their ‘End of the month Summary’ posts. This in my opinion is why these other posters even though they may have the best intention for sharing their thoughts are nothing but noisy gongs. No recommendation of what they feel you should invest in now to avoid the eventual downfall of the market and no sharing of their portfolio’s on any consistent basis! As the famous quote states “show me the money”.

I have made numerous posts on my investments over the years typically in annual posts (which you can search easily enough if interested). My investment style has been changing over the 20 years since I first began investing. For the three year period of 2012-2015 my portfolio only gained 18% for three years, pathetic! However I was invested more conservatively, spent less time on researching my investments, held relatively high amounts of cash and even took some contributions out of my Roth’s to use towards starting certain businesses. As my financial position started to strengthen (as my new businesses started to be successful) I once again became comfortable with increasing my risk/reward profile in my portfolio.

I had been reading this board for a couple of years and learning much from the posts of others here and started to restructure my portfolio. Currently my portfolio’s gain for 2018 is 47.2% (all the while having 10% or greater cash in my portfolio). I will post more on allocation below but want to diverge back to the warning of what these momentum worry posters have. Let’s say there is a big stock market drop. I would agree with a poster who said up stream, I do not believe this is 2000 momentum burst. Remember that was when companies were doing IPO’s and spending most of their cash on Superbowl ads. I think those comparisons to the companies that many discuss on this board are very, very different.

Let’s say though that these “momentum” stocks drop 50%. I think that is fair in the sense that it could happen. I am up 47% this year with 11.3% in cash currently. A 50% drop takes me to -19% of where my portfolio was on Jan. 1st. Now if the stocks I hold in my portfolio drop 50% the whole market is going to drop, by what percentage? I do not know, but I would guess at least 10-20%. Now this is all hypothetical, but basically if I were to have held an index fund since Jan. 1st I would be looking at similar results or at least results that are not too wildly apart in terms of percentages. The problem with discussing “what if’s” is no one knows what will happen or when it happens. Saul is great at making this point frequently. All the while the “momentum” investors may make another 25% or greater till this year end.

On to my portfolio. It is up 12.7% this past month. Like many mentioned it is ridiculous. Almost increased in percentage in one month as my portfolio did for 3 years between 2012-2015. Here is the positions currently held:

Stock	% of portfolio	Change in % since last month	% loss or gain since 8/8/18
ayx	13.1%	        0.2%	                        25.5%
wix	11.7%	       -0.7%	                         5.2%
cash	11.3%	        1.1%	                         0.0%
sq	11.2%	       -1.1%	                        27.0%
zs	11.0%	        7.9%	                        24.3%
ntnx	8.6%	        6.1%	                        -1.1%
mdb	7.8%	        1.8%	                        33.2%
twlo	6.2%	        2.6%	                        11.4%
clne	6.1%	       -0.7%	                         8.1%
pvtl	5.0%	        2.3%	                         8.9%
pstg	3.0%	       -0.4%	                        24.6%
appn	2.7%	        1.4%	                         3.1%
newr	2.2%	        1.0%	                        -0.7%

I used this website to calculate returns since 8/8/18…

Stocks sold:

SHOP-was my largest holding last month now I no longer own. I thought they made a bad business decision which I previously posted on at length, you can search for it if you want my thoughts.

ATVI-I discussed last month that I would most likely sell at some point as it is a large cap and I purposely want small cap stocks in my portfolio. I do think it is a great company and esports will be a driver of growth for the company. I just am trying to be a ruthless allocator of capital and try to drive the best returns from my portfolio. I no longer hold any position.

SQ-It had risen to a percentage where I felt I wanted to reduce my position and take some gains. This is the largest cap stock in my portfolio currently.

Stocks bought:


Same thing can be said for all. I am building positions in my portfolio. Most are well covered by this board. I am currently trying to put together a write up to share on APPN. Started it weeks ago and have not found/made time to finish it.

I tend to group my portfolio into high convection stocks: AYX, WIX, SQ and ZS are currently in this category. Usually if the stock is 10% or higher allocation in my portfolio it is rare for me to sell out entirely in one month. However I did it this month with SHOP. Due to that decision I rapidly built up my ZS and NTNX positions this month.

The next stock are mid convection stocks 5-10% range. NTNX, MDB, TWLO, CLNE, PVTL are all residing at this level currently. I may reduce my CLNE position soon, as it is the smallest cap stock in my portfolio and more of a story stock right now. I am conflicted because I believe it has the highest potential for future returns IF everything works out. Most risk/reward of any stock currently in my portfolio.

Next level of stocks is what I consider my feeling out positons. These may or may not be in my portfolio in long term. If I saw an opportunity arise in my high/mid convection stocks that I needed capital for purchase these would most likely get sold to pursue that opportunity. These are usually higher risk stocks for me because I may not have spent as much time to understand these companies as I would like or feel as comfortable with them as investment. PSTG, APPN, NEWR

New positions purchased: None

There was a lot of movement in my stock portfolio this month. SHOP and ATVI where 21.8% of my portfolio last month, that is a lot of capital to allocate to new companies. My cash holding increased by 1.1%. I am not in a hurry to put this capital to work but would not hesitate if I saw an opportunity to do so.

What do I consider the best opportunities to buy right now. WIX and NTNX but I have a full position in each currently. Today my portfolio holds 12 stocks, I have been strongly considering trying to reduce that number to my highest conviction stocks which would be between 6-8 companies. That will require more study on my part as more concentration equals more risk. The bottom five stocks by percentage would be the most likely candidates to see a reduction in that scenario. If I did pursue that strategy I would possibly increase my cash position as well.

Feel free to reply or send me an email with any insights, question, thoughts or concerns. Thanks.