The SailingDev's Portfolio end of May 2024

Investment Analysis Clubs New Paradigm Investing
1

Hello everyone! :wave:

This is my first portfolio update. I plan to post these monthly to enhance my accountability.

Background

As this is my first post, I’ll share a bit of my investing background. I started investing approximately 12 years ago, when I began my career in IT. I am currently an iOS developer making apps for iPhones & iPads, from Europe (hard-mode when it comes to taxes). I am still allocating a large portion of my salary each month, but I plan to achieve FIRE in the next few years. I’m close to having something even Musk and Bezos are lacking… enough. As John Bogle aptly put it in his book, Enough. :slight_smile:

I’ve always been frugal and liked to save the money I earned, which led me to Mr. Money Mustache’s blog. His writings convinced me to open a brokerage account at TD Ameritrade and start investing in Vanguard index funds. I continued with index investing until COVID hit, then I became more active in my investments and started reading extensively. After discovering The Motley Fool Investment Guide, I started following this community actively and dove deeper into the boards. I began picking stocks based on both the insights found here and my personal preferences, picking up AAPL and Berkshire while maintaining a significant index position. I’ve also started following earnings reports of more and more companies I liked. When AAPL announced the Apple Vision Pro, I acquired META, which turned out to be an excellent investment considering the cost basis (I got lucky). Following the release of ChatGPT, I invested in NVDA, TSM, MSFT, & AMZN—a picks and shovels strategy. Although, focusing solely on NVDA & TSM might have been better as the hyperscalers need substantial capex investments before seeing any revenue from AI. Live and learn! I recently sold AAPL and BRK, mostly because I feel they have hit a revenue growth wall. AI caught them by surprose, and their AR move seems just a dev-kit for now. Their entry in the space benefits META more. I also like META’s approach from both ends: both a AR headset and their Ray-Ban Meta smart glasses (which will benefit nicely from their AI investments too). I really like what Mark is investing in. My cost basis in META is low, but the position has grown large enough I think, so I’m abstaining from adding more. I did buy a little bit after their last ER, when the market punished them hard for their raised CapEx outlook.

Over the past year, I’ve started investing in smaller cap, growth companies and began tracking my portfolio performance, as I’ve seen other members here do.

Asset Allocation
My portfolio strategy keeps evolving, but currently, it looks like this:

  • 90% stocks
  • 10% cash & crypto

Why crypto? I decided to allocate 1% to crypto quite a while ago (maybe 8-9 years?). I chose an amount I wouldn’t lament if it plummeted to zero but large enough to quench my FOMO about crypto. I bought 50% BTC & 50% ETH and haven’t touched it since. It’s now ~3% of my portfolio, but my stance remains the same. I won’t touch it, even if it grows or drops to zero. It’s there just for my FOMO.

I try to maintain a 10% position in Cash & Cash equivalents. Because when “blood runs on the streets” as they say, I’d like to have capital to enjoy stocks going on sale. It helps psychologically at the very least!

In stocks, I’m about 50/50 between mega-caps and smaller-cap companies. I sleep better at night with half my portfolio in these massive corporations that I also believe will continue to grow. This might change going forward, but I’m not in any kind of hurry.

Portfolio Return
I started tracking against the S&P 500 last year and so far, so good. My portfolio is more volatile. I do better when times are good and worse when they are bad, which makes sense. The good times should be more prevalent than the bad times. But that’s easy to say when we’re experiencing good times! I’ll need to hold the course when strong headwinds hit.

image

End of May 2024 Portfolio

image
image1050×1020 89.5 KB

NVDA and META have grown to impressive sizes in my portfolio. And ELF too, for that matter.

I try to let the winners grow, as long as I still believe in their story, until the numbers get too crazy. This is something I’m still trying to learn. It’s not enough to identify a trend and buy at the right time. You also need to know when it’s time to cash in. And it’s so hard to sell companies you like and believe in! I’m trying my best to learn from @PaulWBryant on this topic. This month, I’m working on coming up with a method to put a valuation number on these companies, so I can decide when to start trimming. It’s challenging, especially as these companies are at different stages of maturity. This is the task for the month of June.

19 Likes
2

I would also like to express my profound gratitude to everyone on this board who shares their thoughts and portfolios openly. Special thanks to @SaulR80683, who initiated a wonderful board and set a great example! It’s inspiring to see so many successful individuals generously sharing their knowledge freely and helping others prosper. This generosity is one of the main reasons I’ve decided to become more active in the community. While I am still a novice in stock picking and not yet ready to offer investment expertise, in time, I hope to contribute even a small amount to this remarkable phenomenon.
In this industry, where many try to profit by putting their expertise behind a paywall, the honest support from everyday people becomes even more important. Let’s keep supporting each other!

5 Likes
3

I use 90-day %gain in share price to evaluate. Those up over 20% are worth reviewing and maybe buy more. Funded by sale of those at the bottom. And keeping an eye on moving averages and earnings growth.

2 Likes
4

Good stuff, welcome to the weeds. LOL.

First note, it is usually recommended not to post actual dollar figures. One reason would be your own security, but another is that it can mess with people that may not be up to your level yet.

I saw your post about not getting this on to Sauldom, but I can see why. My investing also has stuff not approved by that board like options, crypto, etc. I started buying crypto more as a peer pressure thing way back when I didn’t know anything about it.

Funny story/aside…back in 2015 or something, the US Marshals had a seizure auction of something like 35 thousand bitcoins. I tried to convince my richest boss, at the time, to look into it. He didn’t, and I was no where near close to affording that auction. (Looking it up now, those coins sold for $640 each…DAAAAMN!!)

So I have bitcoin, cardano, solana, polkadot, and yes, some DOGE. This was all money from collecting cans at work (I told them they were funding my retirement plan, lol). Now that I work remote there iare much fewer contributions to this money as I have to rely on just my own beverage recycling. This total is probably way less than 1% at the moment…(yep, less than .01%). But I use it to pay attention and learn. It has run up this year a lot, so that is cool. (I recently just put some couple hundred $$ into Bitcoin Dogs as well. This was the first ever ICO on the bitcoin chain. So, that meant I was interested in seeing the process.)

As for stocks or indexes, if it is what lets you sleep at night, great. I do not have indexes at this time. I tried the ARK ones for a bit, but they kinda went flat/sideways when things were roaring up a few years back. What i do have for my ‘safer’ net are bigger positions in places like SHOP, and MSFT.

My fast growers are similar - Axon, IOT, ZS, NVDA. These are all in my personally manage ROTH. I also have a much more substantial bit of my retirement in a managed plan where things like MELI, PANW, TSM, AMZN, and META are held. (Lots of people have knee jerk reactions to managed funds, but I found a good place with very low churn and low rates.)

As for Paul, and things like valuation or letting winners run, I have a personal approach which is to focus on how much I have allocated to a position. So recent example, NVDA going into earnings I had pretty good returns. So, I sold the whole position, took the profits off the table and bought back in at the same allocation amount. This way I am not missing out, I do end up raising my avg purchase price, but I didn’t miss out on the rise in price after earnings either, with the same number of shares. Those profits then go split among others to keep their allocations in similar portfolio % overall. (I do not worry about wash sales as this is Roth and tax rules are different here, just like gains on options or those master limited partnership things.)

Good luck to you, and the plan sounds pretty good.

(Edit, above I said same number of shares, well of course it’s not since it was only the same dollar amount allocated. But similar principle, oh well.)

4 Likes
5

@SailingDev

Good post. Quick question: if you were to write a one-sentence thesis for each of your holdings, what would it be?

One of the benefits of writing things out isn’t stress-testing what you own but rather why you own it.

6 Likes
6

Good stuff, welcome to the weeds. LOL.
First note, it is usually recommended not to post actual dollar figures. One reason would be your own security, but another is that it can mess with people that may not be up to your level yet.

Thanks, @dlbuffy! The figures I mentioned represent the last trading prices of the tickers, not the actual value of my holdings. Nonetheless, they aren’t essential to the discussion, so I’ll omit them in future posts to avoid any confusion.

I saw your post about not getting this on to Sauldom, but I can see why. My investing also has stuff not approved by that board like options, crypto, etc. I started buying crypto more as a peer pressure thing way back when I didn’t know anything about it.

I view the strict access control and moderation on Sauldom as beneficial rather than restrictive. Even though I was also denied entry, I appreciate that it preserves the quality of discussions. Without such controls, low-effort contributions could easily overwhelm more substantial, serious posts.

As for Paul, and things like valuation or letting winners run, I have a personal approach which is to focus on how much I have allocated to a position. So recent example, NVDA going into earnings I had pretty good returns. So, I sold the whole position, took the profits off the table and bought back in at the same allocation amount. This way I am not missing out, I do end up raising my avg purchase price, but I didn’t miss out on the rise in price after earnings either, with the same number of shares. Those profits then go split among others to keep their allocations in similar portfolio % overall. (I do not worry about wash sales as this is Roth and tax rules are different here, just like gains on options or those master limited partnership things.)

That’s an interesting approach! It sounds like you’re effectively managing risk while taking profits, which is a tricky balance to maintain. I would argue it may slightly decelerate the growth potential of your top-performing assets if done too often.

3 Likes
7

Good post. Quick question: if you were to write a one-sentence thesis for each of your holdings, what would it be?
One of the benefits of writing things out isn’t stress-testing what you own but rather why you own it.

Thanks for the encouragement, @stocknovice ! In my initial post, I shared the reasons for choosing stocks that aren’t typically highlighted on Saul’s board. For the more common stocks discussed there, I’ve selected a subset based on the extensive analyses already provided by others. Moving forward, I’ll make sure to reflect more on why I choose these stocks and share those insights. I agree, it’s a valuable exercise to really understand why we own what we do. And something I hope to gain from posting on this board.

3 Likes
8

Mihail, please make a request to post on my board and I will approve you. Your posts seem very thoughtful and worthwhile.
Saul

10 Likes
9

I’'ll say Amen to that.

6 Likes