2020 Year-End Portfolio Performance

2020 will be remembered as the year of the individual investor. I’ve never seen so many people excited and interested in investing which totally makes sense since many individual stocks returned several hundred percent in a single year which is insanity. Even those investors who chose to just invest in index funds, the S&P 500 were able to return 18.4% which is great since it builds on the 31.5% it returned in 2019. What’s even crazier is that the S&P 500 returned 18.4% despite being down nearly 35% from its all-time high in mid-March when stay-at-home orders were first announced. I suppose this happens when the Fed is basically printing money every month by buying $80 B in Treasurys and $40 B in mortgage bonds.

For me personally, 2020 was definitely one for the ages. I’ve never had returns this crazy before and I definitely learned a lot this year about investing, portfolio management and taxes.

In 2020, my brokerage account returned 215.9% which I know is a jaw dropping number but I definitely made a lot of mistakes throughout the year. Such as exercising some long-term LEAPs in January 2020 and then selling them because I panicked like many investors did during the March bloodbath which resulted in some unnecessary short-term capital gains. In addition, I sold the majority of Etsy position that I’ve held since $8.34 for $35-40 after a massive drop (Stupid Google Trends freaked me out the week of March 15) only to buy back quarter of my original position at $65 and watching it skyrocket to $170. Another dumb mistake was selling The Trade Desk for a 15% loss around $185 only to see it march to $800+ by the end of the year.

I learned a lot from my mistakes though, such as always keeping in mind why you initially invested in a stock and not letting market fluctuations sway your hand as well don’t try to time the market or get cute with selling and hoping to buy back your position at a lower price. This was something I did twice in April and then again in May.

Despite the 200%+ return for the entire year, there were definitely several major drawdowns or “sector rotations” throughout the year especially the latter half of the year that tested my convictions on some stocks that got hit the hardest. For the most part, as the year progressed, I learned to be more steadfast, but sometimes it really hurt and sucked to see huge losses in a single day:

The above happened when they announced the vaccine efficacy rate in November which I think was probably the biggest dollar loss I’ve ever had in a single day.

Here’s my portfolio at the end of 2020 (rounded position sizes):

  1. CRWD 9.9%
  2. DOCU 8.4%
  3. ENPH 7.9%
  4. ZM 7.3%
  5. ETSY 7.1%
  6. PTON 6.2%
  7. MELI 5.4%
  8. ROKU 5.4%
  9. PINS 4.4%
  10. DDOG 4.3%
  11. FSLY 4.1%
  12. NET 3.9%
  13. FVRR 3.0%
  14. OKTA 2.9%
  15. TWLO 2.9%
  16. TEAM 2.8%
  17. NVDA 2.5%
  18. TDOC 2.1%
  19. SFIX 2.1%
  20. CRSR 1.3%
  21. SHOP 1.1%
  22. CHGG 1.0%
  23. PUBM 0.8%
  24. NFLX 0.7%
  25. SNAP 0.6%
  26. FTCH 0.5%
  27. NIO 0.4%
  28. TCS 0.3%
  29. SPG 0.3%
  30. WORK 0.2%

* Note: This is inclusive of 3% margin debt and LEAP options.

When it comes to managing my portfolio, I generally try to focus on building positions in 15-25 of my highest confidence stocks. I finished the year with 30 stocks since there were a few positions that I have been building starter positions in or that I have kept simply to prevent incurring additional taxes from selling them to re-allocate to other positions. My top 20 positions make up 94% of my entire portfolio and for the most part are all positions that I try to contribute to regularly in terms of dollar-cost averaging into them.

As you can see with my portfolio, many of my investments are in tech companies and more specifically, Software-as-a-Service (“SaaS”) stocks and this is largely because the recurring revenue and high revenue growth rates make these companies more stable and consistent than companies that need to sell one unit at a time. In addition, SaaS stocks generally have significantly higher gross margins than other companies which makes them incredibly attractive investments.

In a future post, I’ll review my individual positions.

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