I thought I should give you an update as the events of the last week caused several changes in my portfolio.
First of all there has been a sell-off of high growth stocks, and subsequently I have about a minus 2% position in cash (or a 2% margin). With some of our companies having just spectacular results and selling off anyway, I tried to have every penny I had invested in them, and some pennies I didn’t have too. (And of course a 2% margin is of no danger, as I won’t get a margin call no matter what).
Next, Zscaler, Snowflake and Crowdstrike all announced results on Tuesday and Wednesday. Zscaler’s were great, Snowflake’s were beyond spectacular, and Crowdstrike’s were definitely showing signs of age and slowing down.
Here is what my positions looked like a week ago,
**.**
**Datadog 19.7%**
**Cloudflare 16.0%**
**Upstart 15.6%**
**Monday 15.0%**
**ZoomInfo 10.4%**
**Zscaler 8.1%**
**Crowdstrike 7.6%**
**Amplitude 6.8%**
**Snowflake 1.0%**
And here is what they look like now.
**Datadog 21.0%**
**Monday 15.5%**
**Cloudflare 11.9%**
**Upstart 11.5%**
**Zscaler 10.6%**
**ZoomInfo 10.1%**
**Snowflake 9.2%**
**Amplitude 7.1%**
**Crowdstrike 5.1%**
And here’s what I did and why.
Datadog – I didn’t touch it. It’s up a percent because it must have declined slightly less than the rest of my portfolio.
Monday – They had reported spectacular results again, just before last weekend, but also said that, because of this second quarterly report coming out, the IPO lockup period ended the next day. Two venture capitalist firms, who have a lot of shares at a very low cost basis, seem trying to sell every share they can before the end of the year. (I believe that I read that the state the two VC firms are domiciled in will add a capital gains tax in 2022. I haven’t checked that but it would explain their frantic selling pace, if true). I’ve been adding lots to Monday this week, at prices I never dreamed I’d see. The rise in percentage of my portfolio doesn’t come close to reflecting how much I’ve added as the price has been so pushed down by the sellers. I have taken it as a wonderful opportunity.
I reduced Cloudflare and Upstart from roughly 16.5% positions to roughly 11.5% positions. They are now in 3rd and 4th place, as Monday has pulled ahead of them.
Cloudflare because it’s just growing at 50%, is a story stock, and has risen in price a great deal, while the other stocks were growing by much higher percents, I didn’t think I needed 16.5% of it, and I needed cash to buy more of Zscaler, Monday and Snowflake.
And I reduced Upstart because it’s not SaaS, and doesn’t have recurring revenue, and is much more subject to the fortunes of the macro economy. I felt that 11.5% was plenty, and I needed more cash to buy more of Zscaler, Monday and Snowflake.
Zscaler reported excellent accelerating results and I increased the position size from 8.1% to 10.6%.
I added just a little to ZoomInfo during the week, simply because I see it as an under appreciated company that is doing very well. It’s down a couple of tenths of a percent to 10.1% because the price is down. The CEO of Snowflake put in a plug for ZoomInfo, and how Snow is using it, in the prepared remarks of Snowflake’s conference call. I was amazed.
Then we have Snowflake that went from a 1% position to a 9% position in a week after truly spectacular results and an even more spectacular conference call.
I didn’t touch my position in Amplitude and it’s a 7.1% position.
Finally Crowdstrike, which is changing apparently from a hypergrowth company to a very successful growth company, but with declining levels of growth. I reduced my position size from 7.6% to 5.1%, which is the smallest in my portfolio.
I hope that this has been interesting to you all,
Saul