It’s been a brutal September and clear profit taking and rotation out of these highly valued stocks. It has been hard to watch after seeing the portfolio up more than 100% just prior to September. When one of my stocks is down by itself, I investigate if anything is wrong with the company. If one of my stocks is down for a good reason, I will often sell the position and reinvest in a higher conviction company. If/when all of my stocks are down, I don’t worry. I figure it’s just the market doing its thing, I try not to be leveraged, and try to remain vigilant about researching the companies and making sure they are continuing to fire on all cylinders. I have sold small amounts of my larger positions to add a little of my smaller positions where I have higher conviction they will continue to grow faster (ex. Sold a little TWLO to buy some more PINS and ZS). Make no mistake though, this has been really tough emotionally and the massive slide this month has to shake anyones conviction in this sector. Could it be the market is recognizing this sector is overvalued? Yes. Could it be profit taking? Yes. Could it be competition is emerging? Yes. Robo trading? Yes. And…and….and. Yes. One thing I know: The fundamentals of the companies are still robust, though and their growth is incredibly strong…so it could be a few YEARS before they get back to the point they were a month ago…or perhaps just a few months. I wish I could tell you, but until the next earnings release, I will continue to just rebalance things by pointedly selling lower conviction stocks and buying those higher convictions stocks…all from the basket of those I now own. I’m still eying a little more ZS and PINS and may even add my AYX back that I sold because the position had ballooned up to almost 24% (and is now back down to 18%). Happy to chat live with anyone and hope you are all weathering the storm and learning from the experience, as I always strive to do.
Hoping it is the beginning of the fund managers getting back into the SaaS stocks after locking in Q3 performance gains. Would be great to see a one day 5% portfolio recovery!! 😜.
