Stock Portfolio

This is my portfolio as of 8/12/18. I really appreciate when others share their portfolio’s as I find it insightful to see how you all invest and how you make decisions on your portfolio allocation. It is really great how Saul and others post every month. Unfortunately I do not have the time (or make the time) to be able to do this. I have in past tried to post at least once a year on my stock portfolio composition and results trying to give back to the fool community. So many on this board and other TMF boards have contributed to my “retirementdough” with their insights, thank you!

I have been investing for 20 years. When I started 20 years ago it was using a financial advisor at the local credit union. To sum it up I got screwed on fees and invested right before the crash in high risk mutual funds. I quickly started to do my own research on investing. I invested in VFINX (index fund). I had been reading the TMF since ~1996 and subscribed sometime in ~2000 (a little foggy on exact dates). I bought a couple of stock on my own, which was total mistake as I did not understand much about how to analysis a company at the time. Over time with SA subscription I began to understand how to invest in companies. I would say I novice when I first started and beginning investor during this period. When the great recession hit I stuffed as much funds as I could in the stock market, I did not have much as I had two young children and a stay at home wife. I invested in NFLX, AAPL, AMZN, etc with the help of TMF.

Since that time I have continued to learn about companies and stocks. I feel I am now an investor, but realize I still have plenty to learn. Saul and others on this board have helped in my education. One thing that I decided to do with my portfolio at the beginning of this year was to reallocate to smaller cap companies with greater growth potential. Around 5 years ago I started a couple of businesses that were highly capital intensive. Due to this I had moved to a more conservative approach to my retirement investments which were doubling as potential disaster fund. I am 43 and have two children and a stay at home wife, which count on me to provide shelter and food. Currently my companies are doing well and my retirement savings are no longer need as a potential source of emergency funds thus the change to a more aggressive approach.

My retirement portfolio was not making the type of gains that it had in earlier years. I knew that I my investments had grown into more stalwart companies with larger market caps such as AAPL, AMZN, and GILD. When I originally invested in some of these companies during the great recession, they were much smaller market cap companies. Now many of them are some of the largest companies in the world. I believe in the law of big numbers. Their stock growth has to become more limited (although their FCF should be rising). I realized that I wanted to change my portfolio to more high growth allocation and focus on smaller to mid cap companies that I felt had potential to turn into high cap companies. This is really more of a return to my investment style I had back in mid 2000’s.

Reading Saul’s board for a couple of years, gave me new insights into investing. He personally has helped me make money, thank you Saul! However to me the best thing about Saul’s board is that it has become a online investment club. I think this is something that TMF should (and probably already has) take note of as I feel it adds value to the TMF. I find myself invested in similar stocks as those discussed on this board. How could one not invest in these companies, as some of the analysis that the members provide here is excellent!!

My current portfolio consists of 14 stocks. I typically hold between 11 to 15. However with in these holdings I usually have a high concentration of portfolio in just a few. Obviously these are higher convection stocks, that I keep a closer tabs on and research more in depth. These are also more likely not to be sold out of my portfolio quickly (unless I see a reason to do so).

My top 4 stocks which could be considered high convection stocks (historically high convection stocks are between 8-15% in my port) make up 52.7% of my portfolio currently. They are:

SHOP – 15.1% -Recently wrote a post on why I like the stock; SA pick
AYX – 12.9% -Saul’s lead, as others his big initial position caught my attention
WIX – 12.4% -TMF boards can’t remember specifically whom to credit; now SA
SQ – 12.3% -had a friend using SQ and selling me on the products-buy signal

The next 3 stocks reside in the 5-10% range and I would be considered mid convection stocks. Usually I let this range of stock appreciate to high conviction territory if successful. I currently own only 3 stocks in this range they are:

CLNE – 6.8% -story stock, followed for years, went in big at 1.40 earlier in yr
MDB – 6.7% -Saul’s board
ATVI – 6.7% -owned for many yrs; contemplating selling soon; high mrk cap

The next 7 stocks reside in the 1-5% range. I would classify these as stocks that I am interested in but may or may not be in my portfolio for long term. I typically do not have as good of an understanding in these companies. In six months half of these stocks will have moved up on price appreciation, been bought up into the next tier or they will be sold out of portfolio as I learn more about each of them.

They are:

TWLO – 3.6% -Saul’s Board
ZS – 3.1% -Saul’s Board
PVTL – 2.7% -Saul’s Board
PSTG – 2.6% -Saul’s Board
NTNX – 2.5% -Saul’s Board
APPN – 1.3% -TMF SA
NEWR – 1.2% -TMF SA

Additionally I have 10.2% in CASH. I know Saul and others here are not in favor of holding cash. However I find that I typically oscillate between less than 1% to as high as 20% throughout the year. I like to have some cash for trading positions. Essentially I try to take advantage of stocks that I feel are undervalued or have decreased substantially on no news, typically adding to a current stock I already own to build out full position.

As an example my SHOP position consists of extra “trading position” monies currently (my normal allocation would be more 10-12%) if say SHOP were to increase 35% in the next 2 weeks, I would sell a small percentage of my position. I may or may not have another opportunity, so I may hold cash until what I deem an opportunity comes around. Additionally if SHOP stays stagnant or decreases in price, I may not sell for a year (with exception of a great opportunity that arises) as I am not necessarily in a hurry.

Another example is that I might possibly sell ATVI soon (I am still debating this in my mind). If I do, it would add to my CASH holdings. Unless I gain more knowledge of my lesser stock holdings or what I deem as a buying opportunity arises for a stock position it would just stay in cash. This is one of the reasons I am not in a hurry to sell. If I did sell it would increase my cash position to 16.9%.

As far as diving deep in to my stocks, they have for the most part been covered on this board. The one exception is probably CLNE. This stock would not fit Saul’s criteria. It has not been growing rapidly. However it recently sold 25% share to Total (one of the largest energy companies in the world. It sells CNG (compressed natural gas) and LNG (liquified natural gas), they also have Redeem (Renewable natural gas). The Redeem product description from their website; Redeem is the first commercially available, renewable natural gas vehicle fuel. It is derived entirely from organic waste streams and is available in either CNG or LNG form.

CLNE is basically refueling stations for natural gas trucks. Think of your local gas station, but for commercial trucks running on natural gas. Currently around 570 stations in the U.S. and Canada with more planned. One just needs to look at some new air quality standards taking place in California and the rest of the world to see where all of the U.S. is headed eventually. The Redeem product is somewhat unique and has been growing at a faster volume sold % than that of the traditional CNG and LNG categories. According to the company it reduces carbon emissions by 70% when replacing diesel or gasoline. Some point to battery powered trucks as a potential threat, this is a long debatable topic, but I will say after researching it does not scare me.

Why the Total investment was big. It stabilized the company financially and at same time they announced a program to lease or finance for zero percent interest to operators that switch to natural gas truck. Additionally participants will be guaranteed lower fuel prices than diesel. This program will ensure that the cost of fleet will be similar to or lower than traditional diesel engine for operators. This coupled with the additional regulations will drive units to natural gas. This will increase volumes of natural gas sold by CLNE. I would expect that this increase in volume to be realized two quarters from now. Then growth in company and stock should take off.

This is a story stock, they have not proven it yet. However I believe they are on the way, time will tell. It is also the lowest market cap stock I own at a value of 557 million. Every other stock is valued in billions. The potential TAM is huge, think very long runway. The SA CLNE board is pretty active, if interested I would encourage you to learn more at that board.

Current market cap of stocks round up or down in billions:

ATVI – 55
SQ – 28
SHOP – 15
NTNX – 9
TWLO – 7
NEWR – 6
PVTL – 6
PSTG – 5
WIX – 5
ZS – 4
AYX – 3
MDB – 3
APPN – 2
CLNE – 0.5

Year to date my portfolio is up 34.5%. Russell 2000 Index is 10.63%. I use the Russell 2000 as if I was not interested in managing my own portfolio I would just invest in an index fund that mimics the Russell 2000. I am going to try and post my portfolio performance more regularly as it is my favorite posts when others post their portfolio updates.


Reading Saul’s board for a couple of years, gave me new insights into investing. He personally has helped me make money, thank you Saul!

I bet all of us here can echo this. Great review, Retirementdough – I enjoyed reading your thoughts. Congrats on the results.