It has been awhile since I posted my overall portfolio percentages. After spectacular 202.6% returns in 2020 (see prior post on January 12th), we have had a spectacularly volatile year-to-date portfolio performance in 2021, punctuated with wild and dramatic swings in both directions. After being up +20% in the first 42 days of the year, the portfolio plunged off a cliff after Feb 12 with an overall sector rotation out of technology…ultimately dropping around 40%. By investing in great, fast growing companies with very solid fundamentals, screaming growth, and very strong balance sheets, it was easy to disengage psychological from the thrilling ride without feeling the need to liquidate them or jump of the roller coaster on the way down. Having gone through five such 30%+ corrections in just the past 3 1/2 years (and also having lived and invested through both the dot.com crash in 2000 and the financial crisis in 2008) I was sufficiently confident the portfolio would bounce back… just as it has done the past six weeks…and more!! After dipping almost 40% from its former YTD high on February 12th (portfolio lows were on May 6th and May 12) exactly 3 months after hitting all time highs (ATH), the portfolio has now roared back from its lows to hit a new ATH again for the year (+20% as of yesterday). If we had sold our investment positions and not had sufficient conviction to sit tight and ride it out, we would never have been able to catch the snapback recovery that has occurred over the last 6 weeks to the tune of almost 50% from its lows on May 12. It is for this reason that I strive to invest in the absolute great companies with solid fundamentals and proven management teams and to simply let the stock price fluctuate in the short term and do what it wants…eventually, over the long term and every single time for the past 30 years, the stock price has come around to reflect the fundamental growth and strength of the underlying company it represents.
As of the end of trading today, my portfolio of 10 growth companies stands as follows:
| CRWD | 24.2% |
| NET | 18.2% |
| DOCU | 12.4% |
| DDOG | 11.3% |
| LSPD | 6.6% |
| UPST | 6.5% |
| SNOW | 6.4% |
| ROKU | 5.3% |
| ZM | 4.8% |
| ASAN | 0.9% |
Many of these companies I have held for more than 1 or 2 years. CRWD in particular has grown into a monster position that I have had to pair back several times to keep it below 25%, having initiated positions almost two years ago around $50/shares; today it trades at $253. When a company’s stock price become 5x that quickly, its not hard to see why it balloons up so quickly to such a large position. I will continue to trim CRWD opportunistically to keep it under 25%, but am very happy to continue having it has my number one position in the portfolio. Other positions are less than a year old, but ones that I feel still have the ability to 5-10x themselves quickly, such as UPST, LSPD and ASAN, the last of which (ASAN) I initiated just a few short weeks ago on great earnings at around $45/share and which has already grown 40% to $63/share as of today.
UPST and LSPD I have been building for the past few months and will continue building the positions as long as their revenue growth, path to profitability, customer acquisition and other metrics continue to accelerate. Ideally I would like them around 8% positions prior to their next earnings release. Conversely, I believe/fear that ZM’s rapid growth is slowing and therefore I have been reducing my position when I can without significant tax ramifications. The remaining position recently became a long-term capital gain (held greater than 1-year and taxed at a lower rate), so now I feel more comfortable reducing it further to use the proceeds to buy faster growing companies (like UPST and LSPD).
NET has been touching several new successive all time highs the past few weeks and the percentage of the portfolio had grown above 23%. I chose to slightly reduce my non-taxable holdings in NET to add to other positions discussed above, including DOCU, which I feel is re-accelerating and has only touched the tip of the iceberg in the TAM they have for their e-Signature business, not to mention the new products they are introducing or their international penetration into 8 new countries right now. I obviously still have great conviction in NET and it remains my second largest holding, but I do not believe its current growth of 51% q/q compared to its relatively high valuation warranted such an oversized position in the portfolio line up and I wanted to take a little off the table. I may continue to trim the NET position by a few percentage points, primarily because I’d like to see a higher percentage of the portfolio in some of my faster growing companies, which includes SNOW (110% q/q revenue growth), UPST (90% q/q revenue growth) and LSPD (127% q/q revenue growth); which I don’t believe are necessarily reflecting that fundamental growth in their stock prices yet.
Asana (ASAN), my newest and smallest position, appears to be re-accelerating right now with a 53% increase in overall customers over $5k, but more importantly and impressively, a 92% increase in customers over $50k! Their guidance of 60% revenue growth next quarter and 50% for the year, which they will likely handily beat with this kind of acceleration in customer growth, is a clear sign they are accelerating their growth. Their stock price has certainly been screaming higher lately, so I would not be surprised if it let off a little steam and gave some back in the short term, but I suspect long term they will do extremely well and therefore initiated a tiny 0.6% position that has done very nicely already and grown into a 0.9% position…I will continue to watch ASAN and determine whether to add to… or jettison… the position after their next earnings release comes out.
Happy Summer! (June 20th Summer Solstice)
Cheers! -Poleeko
Nice writeup, Poleeko. I just subscribed to your weekely emails. You just might want to correct the 0.09% of your Asana position, as I reckon it should be a 0.9%. I found out about your blog on Saul’s board and I totally agree with your way of thinking. Best, Silvio.
Thank you, Silvio! Definitely missed that decimal point. Super grateful for the eagle eye correction! Yes, should have been 0.9% and now corrected thanks to you… fortunately ASAN has since grown into a 1.2% position as the stock price continues to surge higher. Thanks again!