TracyK's portfolio through August, 2018

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Hello fellow investing community members,
Here are my results through August. I agree with Saul and others - what an insane month!

YTD, my portfolio is up 49%
S&P = +8.5%
NASDAQ (.ixic) = +17.5%
Russell 2000 (iwm) = +13.5%

Another way to look at it:
So far this year, my portfolio is up 49%
For the trailing 12 months, it’s up 62%

Top ten stocks - % growth:
TTD 172.10%
SQ 155.70%
CRSP 141.40%
AYX 129.70%
TDOC 122.50%
ABMD 116.90%
MDB 100%
PAYC 93.10%
NFLX 91.50%
TEAM 66.90%

Why aren’t my results better?
(A) I have several companies that are good, but not good enough. The list includes: MELI (Mercado Libre), ATVI (Activision Blizzard, EPAM, MFA (MFA Financial), AAPL (Apple), JD (JD.com), and TCEHY (Tencent). I’m in the process of either selling all or a portion of the above.

(B) I have a hefty amount of cash.

Top ten stocks - % holdings:
First: NFLX (Netflix) 26.9%
Second: Cash ($$) 7.5%
Third: AAPL (Apple) 6.9%
Fourth: AYX (Alteryx) 4.9%
Tied for Fifth: MFA (MFA Financial) and MDB (Mongo) 3.9%
Sixth: ABMD (Abiomed) 3.4%
Seventh: SQ (Square) 3%
Eighth: PAYC (Paycom) 2.6%
Tied for Ninth: TLND (Talend) and TTD (Trade Desk) 2.4%
Tenth: TDOC (Teledoc) 2.2%

76.4% of total portfolio. This number has improved because I’m slowly learning to adopt this new way of investing. Yeah, yeah – I’m a slow learner.

Results at the end of each month:
January +5.9%
February +20%
March +20%
April + 20%
May +26%
June +36%
July +31%
August +49%

August activity:
Sold CLDR (Cloudera)
Sold GPN (Global Payments)
Sold HUBS (Hubspot) This was one of my top performers in 2017

The reason that I sold is I’m trying to have a more concentrated portfolio, and also create the cash to more fully invest in the companies that I have a stronger conviction.

Thanks to the folks that helped me think about my “minnows.” By that I mean I have a lot of small guys that are doing great, and I need to concentrate on them. I also appreciate others that post their results. As I’ve mentioned before – that has helped me say goodbye to companies that I owned for years that frankly weren’t performing as well as my new style of investing. Ethan, I especially got a kick after reading your update. My kids are slightly younger than you, and I’m going to share your post with them.

~TracyK

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“Sold HUBS (Hubspot) This was one of my top performers in 2017”

HUBS is up over $20.00 in the last 4 days. That must have been some Investors Day meeting!

Rob

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Hi Tracy, I hope comments are welcome.

Why aren’t my results better?
(A) I have several companies that are good, but not good enough. The list includes: MELI (Mercado :), ATVI (Activision Blizzard, EPAM, MFA (MFA Financial), AAPL (Apple), JD (JD.com), and TCEHY (Tencent). I’m in the process of either selling all or a portion of the above.

Makes good sense

(B) I have a hefty amount of cash.

I don’t think that 7.5% is excessive at all.

Top ten stocks - % holdings:
First: NFLX (Netflix) 26.9%
Second: Cash ($$) 7.5%
Third: AAPL (Apple) 6.9%
Fourth: AYX (Alteryx) 4.9%…

I wouldn’t list cash as a stock. Cash is cash. Let me restate it:

Top eleven stocks - % holdings:
NFLX (Netflix) 26.9%
AAPL (Apple) 6.9%
AYX (Alteryx) 4.9%
MFA (MFA Fin.) 3.9%
MDB (Mongo) 3.9%
ABMD
SQ
PAYC
TLND
TTD
TDOC Teladoc 2.2%

So you have eleven stocks here, making up 68.9% of your portfolio (after we remove the 7.5% which is cash), and these are your largest positions… BUT Netflix makes up 39% of those top 11 stocks (26.9/69.9 = 0.39) and all the rest is chicken-feed. By the time you get just two places below Netflix you are down to a 4.9% position, and your eleventh position is is a 2.2% position. You are going to do pretty much as well as Netflix does, and all the rest is window dressing. Now I don’t follow Netflix or know anything about it, but having a portfolio pretty much dependent on one company is more risk than I would dream of taking, but that’s just me. Netflix may end up doing better that any of the other companies, but… do you want to risk your future on how one company does? I’d suggest cutting Netflix down below 20% as first priority and put the money into your highest conviction other companies.

And, since you have another 23.5% of your portfolio that you haven’t listed, and which are less than 2% positions, you must have another 15 to 25 additional stocks in tiny positions. I’d consider getting rid of the ones you can bear to part with, and get down to a portfolio you can manage.

Best, and thanks for posting!

Saul

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Tracy, you said those eleven stocks plus cash came to 76.4% of your portfolio, but when I add up the percents you give, it only comes to 70%, and to 62.5% without the cash, so Netflix is actually 43% of your top 11 stocks, even worse than the 39% I got before.

Saul

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Wow, Saul - thank you! And you’re right - if I keep cash ($$) out of the results - the picture becomes clearer. In fact…I began Phase One yesterday. I added to my highest conviction stocks, and sold ATVI and EPAM. Next step: I’m trimming NFLX to 20%. I have sold three times this year, and I need to do more. I tell myself (repeatedly) - sell high, and it’s high enough.

~Tracy

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