Upsidedown's November 2021 portfolio summary

YTD return: -0.7% (As of 12/3)

Current drawdown from ATH: ~27%

Portfolio hit an all time high drawdown of 36.14% mid-may.

YTD returns by month:

November: -0.7%
October: 30:89%
September: 19.29%
August: 23.91%
July: -1.57%
June: +8.99%
May: -2.84%
April: 6.52%
March: -16.5%
February: +1.26%
January: +7.91%

2020 return: 159%

First a few ramblings around my portfolio performance this year and apologies if I misstated something or out of order for this board.

A humbling elevator down after what I have journaled in my October month end summary below.

“Two more months to go in this year and a lot of enthusiasm around pointing to seasonality and all. CNN Fear and Greed Index is currently at 77 which I believe is the highest it has been this year -
But thanks to Saul’s and others’ wisdom here, it does become easier to learn over time to stay invested close to fully deployed all the time and pretty much ignore the market seasonality.“

And then about my first ever >20% position in Upstart I noted - “ I have been holding a 20% position for the first time and it hasn’t been that scary so far. I’m hoping that I have developed the stomach for carrying larger position sizes as part of a concentrated portfolio.”

And then a sudden change of scene, now cut to a brutal punch sitting at negative YTD and significantly trailing SPY, QQQ and all of FANG.

Reflecting on my notes from last month, I probably did realize that I was continuing speeding along the highway even when I was suspecting a steep cliff coming up shortly.

Around the same time I found this board while wandering around online from all the extra time with WFH situation last year, I also deep dived into hedging strategies either shorting ETFs or buying inverse ETFs to reduce drawdowns or moving into cash. And then I also noticed that Saul with “stay 100% invested all the time” strategy, had to endure a prolonged drawdown 2008-2013. So even for Saul, it took almost 5 years to get past his ATH in 2008. So I figured, given enough time, as am fully aware that am orders of magnitude away from Saul grade investing acumen, my guaranteed scenario is even longer, like a decade or more for recovery if I stay fully invested all the time.

I contrasted these different investment philosophies with my personal profile where I am still at least a decade away from retirement which also means I will continue to have income to contribute to investment funds. So I figured, I may be able to cut down on some net worth recovery time if I can add funds during drawdowns (which I do with DCA and additional deposits during drawdown periods in a separate, not as actively tracked brokerage account). I also thought if Saul, >15 yrs into his retirement, could endure such pain from those multiyear drawdowns, I should also tailor my expectations accordingly and instead focus on picking quality companies, building investing stamina, decision making which ultimately are the biggest contributors to Saul’s three decade success story imo.

One thing that is different with this drawdown from earlier this year for me is that then I could attribute it to my decision making around positions in some speculative / weak confidence companies like SoFi, Curiosity Stream, Skillz etc but this time around there is no such hiding. Will have to see how I feel about this a few years later. I hope to not just get better at sucking up to my mistakes and explain away my underperformance with excuses but actually improve as an investor and see it in numbers.

Now onto my current holdings.

Portfolio holdings.

Upstart - 15%
ZoomInfo – 14%
Monday - 12%
Digital Ocean - 11%
Crowdstrike - 10%
Amplitude – 10%
Affirm - 10%
Mercado Libre – 9%
Bill - 8%
Cloudflare - 1%



I added ~25% to my then going into the earnings position and took as much out right after earnings as the sentiment made a U-turn. Slap on the wrist is real and it still hurts.

Revenue → Still a hyper growth company although came back to earthly levels as they lap Covid hit quarters.

Gross Margin → Consistent 80%+ margins. No problems with the trend.

Operating leverage → Adj EBITDA margin positive since long, no problems here.

Leadership → Founderled team, young. Although their track record in navigating long periods of

Business Model → AI based lending platform company. General lack of confidence in their ability to sustain revenue growth for a meaningful period of time. Risk of even revenue deceleration as evidenced during Q2, 20. With almost all the revenue from Fees, revenue sustenance risk is real and unlikely to go away given their industry focus.

Balance Sheet/Cash flow → Comfortably OCF positive, no debt issues.

Potential → Broad based lending industry is a breeding ground for socio-political scrutiny. So the faster and larger they grow, the more eyeballs on them. I don’t think there is a precedent for a company of their nature but it’s hard to imagine them to be a 100B+ company even with auto and mortgage lending.

Easy to follow → Lots of coverage on Saul’s board and they provide good metrics but given their non-SaaS nature, it is not straightforward to understand what pitfall may lie ahead of them.

Guidance / Key Metrics →
% of loans automated, # loans transacted QoQ%, Contribution Margin all came at lowest of past 5 quarters.
Revenue Guidance came at 83% annualized but then their revenue is non-recurring in nature. Overall, I guess on par guidance but disappointing key metrics and then they have the concentration risks with Crossriver bank.

Platform/Moat/Category Crusher/Optionality →

Don’t think they are a platform yet where there is an ecosystem built on top of their products. Lenders in due course of time that aren’t seeing results with them may switch to the next best option in the market.

Also not sure of their moat yet. Actionable insights based on data is a tough nut to crack and only demonstrated by Google, Facebook and the likes at massive scale over long periods of time.

They are probably a category crusher in AI based lending models for small to medium sized lenders that probably will never have critical volume of data and infrastructure.

Although on paper, they appear to have optionality I think it still needs to be seen if historically disparate sub sectors can be conquered by a single provider with a proprietary AI modeling capability.

Conviction → Medium


Revenue → Steady growth this year starting at 50% and at ~54% organic YoY last quarter.

Gross Margin → Consistent 85%+ margins. No problems with the trend.

Operating leverage → Highly profitable although I don’t think they explained reduced profitability this quarter as Operating Margin came at 10% down from 24% Q2 21.

Leadership → Founderled CEO, young. Very articulate.

Business Model → SaaS based leading B2B contact data combined with sales intelligence, engagement software, and workflow tools provider. As long as they are capable of maintaining their database among the industry leading, I think their revenue is resilient although DBNR growth may not be as easy.

Balance Sheet/Cash flow → Comfortably OCF positive, although carries some debt but appears to be on choice and no major red flags.

Potential → Probably every company will have a need for a ZoomInfo like product but I wonder if that also limits their ability on how vertically integrated they can get in the CRM space. International revenue is still only 11% of total revenue so that may provide them enough growth ahead to upto >5x from the current ~25B market cap. In addition, they will have to deal with the taboo around Personally identifiable information.

Easy to follow → They have been acquisitive so that creates some muddy waters for easy tracking. However I think theirs is an easy to understand product portfolio and decent coverage on Saul’s board as well as metrics shared by the company.

Guidance / Key Metrics →
Steady state affairs with >100k ACV customer additions, revenue guidance at ~52% inorganic. Nothing outstanding but nothing alarming as well.

Platform/Moat/Category Crusher/Optionality →

I doubt if they have the opportunity to grow into a CRM, SAP like platform.

They may have some moat in their niche area but not sure if it’s impenetrable as Sales reps are always on constant lookout for better ways to scout for their prospects.

Don’t think they are much of a category crusher nor do they have any meaningful optionality.

Conviction - High


Revenue → Hyper growth by all means and probably should be at their size to be qualified to feature on this board.

Gross Margin → Consistent 85%+ margins. No problems with the trend.

Operating leverage → Loss making but trending in the right direction and could expect then to be at or near profit in the near future.

Leadership → Dual CEOs, not usual. Founderled.

Business Model → SaaS company with recurring revenue nature. Team management Project management tools, although not as sticky as enterprise software that typically have deep integrations with all facets of the organization, there may be some stickiness aspect to them for teams that have already adopted them.

Balance Sheet/Cash flow → Positive OCF, no debt problems.

Potential → Their USP is customizability to suit any team’s needs which may act as a counter weight to their potential to be like that of ServiceNow where enterprises prefer some uniformity across the board.

Easy to follow → Israeli company but relatively easy company to follow with decent coverage on Saul’s board and comparisons with the other hot kid in town in this space, Asana.

Guidance / Key Metrics →
Rev guidance, >50K customer growth on par with expectations.

Platform/Moat/Category Crusher/Optionality →

They may have some optionality to add more adjacent products like service management software, issue tracking, file sharing but moat, platform stature can only come with huge scale. Category though may have multiple players with no one company able to crush.

Conviction: High

Digital Ocean

Revenue → Medium growth profile at ~35% YoY.

Gross Margin → Hit their highest ever 61% gross margin. Given they are IaaS, their margins will probably never by 80% SaaS like.

Operating leverage → 30% Adj EBITDA margin profile, so pretty good.

Leadership → Not founder led, some blank space in this area.

Business Model → Popular IaaS provider for the individual and small development teams. But as teams scale, they may choose to graduate to Amazon Cloud, GCP, Azure and the likes. But there will always be space for Digital Ocean like services in non-enterprise scale companies.

Balance Sheet/Cash flow → Positive OCF, no debt problems.

Potential → They are already popular in their target market and may continue to be so but it’s hard to see them in the multi-billion dollar run rate league with 30%+ growth rate.

Easy to follow → Nature of the business, metrics shared by company are relatively easy to keep track of their progress or lack thereof.

Guidance / Key Metrics →
Reported loss of customers this quarter, which they explained with “The slight sequential decline from Q2 was the result of our implementing enhanced security protocols to remove certain low-value customers from our platform.”
They have been only adding customers QoQ only at the rate of 0-2% and now this negative adds doesn’t put them in good light.

Rev guidance is again in the same range, maybe a basis point or two acceleration at best.

Platform/Moat/Category Crusher/Optionality →

Interestingly, I think they may have some aspects of all four characteristics in their target market but not sure if it helps them accelerate their revenue growth into hyper growth mode.

Conviction: Low


Revenue → Still posting decent hyper growth numbers but with clear deceleration.

Gross Margin → Solid 80%+ margin profile.

Operating leverage → Been profitable on a non-GAAP basis since long, no problems here.

Leadership → Founder led, articulate and very consciously aggressive PR strategy.

Business Model → Cloud based security SaaS provider with recurring nature.

Balance Sheet/Cash flow → Positive FCF, no debt problems.

Potential → Their revenue growth seems to be hitting a ceiling, legacy competitors may have caught up to them, there may be a situation in security SaaS industry that no one company can build a product that is fool proof and enterprises may be satisfied with a “good enough” solution.

Easy to follow → SaaS nature of the business, metrics shared by company are relatively easy to keep track of their progress or lack thereof. Although it has been hard to explain their lack of revenue acceleration with all the SolarWinds, Colonial Pipeline, government agency uptake tailwinds.

Guidance / Key Metrics →
Slowest QoQ% customer adds from over two years, steady but continuation of deceleration of revenue guidance.

Platform/Moat/Category Crusher/Optionality →

They have a marketplace but not sure if there is any ecosystem of third party solution providers that built solutions on top of their services.
Moat in Cybersecurity space may be not as impenetrable as majority enterprises may just be happy to look for a good enough solution and not necessarily spend premium dollars for premium products.

Conviction: High


Revenue → 50-70% growth rate on a smallish base with some acceleration past two quarters

Gross Margin → ~70% range, trend is flat.

Operating leverage → Not yet profitable but close on a non-GAAP basis at -5%.

Leadership → Founder led, young. Recently IPOed.

Business Model → Digital Optimization SaaS company that allows for measuring and optimizing customer behavior. >95% revenue is recurring. May be less mission critical and less recession proof.

Balance Sheet/Cash flow → Inconsistent FCF trend, currently at -35% non-GAAP FCF Margin. No balance sheet problems.

Potential → Should be able to grow their TAM with newer products and acquisitions as most aspirational companies will have a need for their products at some point. Sub 10B market cap currently.

Easy to follow → Recent IPO, so needs to wait for some track record but metrics to follow are straight forward.

Guidance / Key Metrics →
Rev guidance 56% YoY, 3% QoQ so nothing super exciting. Customer adds YoY% is at 54% as compared to 51% YoY last Quarter.

Platform/Moat/Category Crusher/Optionality →

Still a small company in a smallish category so not sure if they have any long standing advantage over peers.

Conviction: Medium


Revenue → 55% YoY but only 3% QoQ which is the lowest of the past 9 quarters. Not good.

Gross Margin → 42% gross margin, inconsistent GM profile given their nature of business.

Operating leverage → Inconsistency here as well. -16% non-GAAP Operating Margin as compared to -5% last year.

Leadership → Founder led, ex-paypal.

Business Model → BNPL leader. A new payment method that every merchant is probably forced to offer to customers. But the risk is Affirm’s as they carry the loan and/or have to find a bank or investors for offloading them. Prone to macro-economic swings.

Balance Sheet/Cash flow → Not a clean trend, carries debt.

Potential → Afterpay which probably had a better company profile and global reach, was acquired 29B which is where Affirm currently is. They may become ubiquitous but they may not command SaaS valuation ever.

Easy to follow → Complex industry with complicated dynamics.

Guidance / Key Metrics →
Guided for 62% revenue growth which should be around 70% which would be an acceleration. Also doing great with Active Customer and Active Merchant growth. They made all the right headlines tying up with Amazon, Walmart, Shopify etc so that may give some runway in terms of revenue growth.

Platform/Moat/Category Crusher/Optionality →
They probably can be considered a category crusher in BNPL space in US.

Conviction: Very low to none.

Mercado Libre

Revenue → 67% YoY growth lapping a Covid quarter but only 9% QoQ which is in the pre-covid range. Even tougher comps to deal with next two quarters. Same situation with GMV.

Gross Margin → 43% which came down from 50% about two years ago as they focused on expansion.

Operating leverage → They were able to maintain profitability or stay close but they have been around over 2 decades, so maybe they should be so at minimum.

Leadership → Founder led, very convincing team.

Business Model → Primarily ECommerce and some Paypal/Square like Fintech aspirations.

Balance Sheet/Cash flow → There is some seasonality where they dip to negative OCF during Q1 each year, they have been cash flow positive since long. Not the strongest balance sheet with the capex nature of business.

Potential → They probably have the biggest chance to be like that of Amazon in the latam world as they become more and more vertically integrated with logistics and fintech products.

Easy to follow → Non-US company, no first hand visibility into their story besides online reading and company reporting.

Guidance / Key Metrics →
GMV, Items sold, TPV all reverting back to pre-covid levels. Not hyper growth by any means.

Platform/Moat/Category Crusher/Optionality →
A successful marketplace with $1.9B quarterly revenue and 7.3B quarterly GMV is a platform with an ecosystem of partners building services and products on top of them.
They also probably have a strong moat, are a category crusher and has optionality.

Conviction level: Medium .

Revenue → 78% organic revenue growth, accelerating revenue but wonder if it is because of easy compares as the SMB market that they cater got hit by Covid.

Gross Margin → Consistent 70%+ margin profile.

Operating leverage → Loss making with ~-10% non-GAAP operating margins.

Leadership → Founder led, 15 year old company that IPOed in december 2019.

Business Model → Back-office accounting software provider which are a must have businesses but there may be some SMB related customer churn.

Balance Sheet/Cash flow → Not consistently cash flow positive, decent balance sheet.

Potential → With acquisitions they may be able to maintain good growth as companies try to consolidate back office functions with one provider as much as possible.

Easy to follow → Recently started following, although some coverage on Saul’s board. They also acquired two companies this year which may make it a little difficult to piece together their story.

Guidance / Key Metrics →
Lapping easy covid comps, acquisitions make it difficult to see how they are doing here. Need to analyze more.

Platform/Moat/Category Crusher/Optionality →
I think their products once implemented are sticky. They may have some optionality to add adjacent products and companies. Not sure if they are a category crusher.

Conviction level: Low.

I sold out of Sea Ltd, Roku, Lightspeed, Palantir during the month because of receding conviction in them and wanting to hold fewer positions. Even now, my position sizes aren’t in line with conviction levels so plan to fix it this week.

Apologies for such a long summary which probably is useless and uninspiring results for everyone but I’m still experimenting on the right format and took longer than I anticipated probably because I haven’t spent as much time as I would like during the month.

October Summary -…

September Summary -…

August Summary -…

July Summary -…

June Summary -…

May Summary -…

April Summary -…

March Summary -…


Apologies for such a long summary which probably is useless and uninspiring results for everyone

On the contrary, this was one of the most useful monthly summaries I have read for a while. Let me try to add some value to the board and then hopefully I’ll be justified in a little rant:

I appreciated your report because you are consistent in your analytical approach, well structured and brief.

Many of your conclusions are different to my own, but because you are consistent across companies, I can calibrate where you are coming from and weigh things appropriately, making allowances for experience and bias. This makes the areas of dissonance useful as a challenge to my own thinking.

The way I like to use monthly reports on this board is to see where the differences are with my holdings and conviction levels and make sure I can justify them. (So listings of companies and allocations without rationale have no value for me - but I can cut folk some slack as they learn how to do it - It is not something that I am ever likely to do!)

Biases can be problematic: for example Saul has had sufficient bad experiences with Adtech companies that he won’t go near The Trade Desk. I can understand why I hold it and don’t get concerned that he doesn’t. Atlassian was another one.

On the other hand, with a technology background, I tend to put too much emphasis on Product: I was late loading up into DDOG and will probably be stickier to CRWD and OKTA than many here. I recognize my biases and so I try to compensate for them……you will never find me bitching and moaning that the market has been mean to one of my companies. All I can do is to try to be fully invested in what I consider to be the best companies, in proportion to my conviction level.


If I’m uncomfortable with what the market thinks one of my companies, I may take the opportunity to layer on an options strategy, but that is only short-term opportunism and should not be confused with Plan A!

I’ve been following this board since before the days of Skechers and Bank of the Internet. I’ve witnessed the evolution of many of the board participants since then - which is what enables me to calibrate their biases today from my own perspective. AND EVERY NEWCOMER CAN DO THIS TOO, as every post is still there.

In addition, there are well curated collections of core posts that newcomers are pointed too.

SO, PLEASE DON’T BOTHER MAKING A POST ON HERE UNLESS YOU ARE GOING TO TRY TO ADD SOMETHING OF VALUE TO THE COMMUNITY. Saul is great, the community is great and valuable, we all know that. We don’t need multiple posts from newcomers JUST making these points.

Saying you have “read all the material and just want to say what a great resource this is” just shows that you have failed to read enough of the material to understand what is “signal” and what is “noise”.

Most of us don’t need to post. At all. Ever. But if we are going to, let’s at least make sure that we are making an effort to add something to the community.

That’s what I wanted to say. Hopefully providing a bit of color on how I leverage this resource was a sufficient contribution.