June 2021 Month End Portfolio Recap

I started my February update with Wow. What a f’ing terrible week. Good grief. *facepalm*

I suppose I’ll start my June update with:

What an amazing June comeback! 🚀🚀🚀

Investing in growth stocks and concentrating your entire brokerage portfolio to 20-30 core positions that aren’t terribly diversified is not for the faint of heart. After 90 bruising days of what appeared to be a non-stop sector rotation, we finally bottomed on May 13th, 2021 and then from May 13th to June 30th, my portfolio rallied 67% to finish the month up +22.2% YTD.

There’s been a lot of news of high inflation, US treasury yields, higher than expected unemployment claims, etc. A lot of this news resulted in temporary market volatility (admittedly stomach-churning volatility), but those fears seem to have subsided (at least for now) to end the first half of 2021. I have no idea what the second half of 2021 will bring, but I will continue to add opportunistically to my strongest conviction positions and cut my losers.

I will just state that it seems the economy is on the rebound with a better than expected June jobs report and lower than expected unemployment claims. The June Manufacturing PMI also came in at 60.6% which indicates pretty strong expansion (anything over 50 is considered expansion and 60 is pretty strong, albeit slightly weaker than May’s number). 

The economic data points indicate that the economy is recovering and is still moving upward based on my understanding of these data points. I think what will determine whether or not the market keeps going up is how “temporary” the high inflation that we’ve been seeing is and how earnings play out in Q2 which will come out in the next few weeks. There will likely be high expectations going into Q2 earnings since the market’s P/E ratio is near an all-time high, and market bears are all stating the market is overvalued and too “bubbly,” but I generally ignore the bears and look at the macroeconomic data.

Taking Profits & Dollar Cost Averaging Update

I took the liberty to take some profits off the table right before the end of June since I said I’d start trimming some profits if I ever hit +20% again this year, and that’s what I did. Granted, I am still dollar-cost averaging (DCA) to 12 stocks every Monday and I plan to do this indefinitely. For those interested, those 12 positions are:

Crox $CROX
Crowdstrike $CRWD
DataDog $DDOG
DocuSign $DOCU
Etsy $ETSY
Fiverr $FVRR
Peloton $PTON
Roku $ROKU
Snap $SNAP
Twilio $TWLO
Upstart $UPST
Zoom Video $ZM

I am also DCA’ing every week into $SCHD which is the Charles Schwab US Dividend ETF which has a 2.72% dividend yield and a 0.06% expense ratio. I did a lot of research and I think this was the best yielding dividend ETF that had a low expense ratio, a high dividend yield that grows every year, and strong stock appreciation. I know there are other better yielding dividend ETFs, but I think this particular ETF had the right balance for what I was looking for in a dividend ETF.

Portfolio Update

S&P 500 return YTD: 15.25%
My portfolio YTD: 22.22%
My portfolio end of May: -5.31%

My Portfolio Breakdown

DOCU10.5%
CRWD10.3%
ROKU8.5%
ZM7.6%
FVRR7.2%
ETSY6.5%
DDOG5.5%
PTON4.9%
UPST4.4%
SNAP4.3%
MELI3.9%
TWLO3.8%
ENPH3.5%
NET3.2%
NVDA3.0%
TEAM2.4%
CROX2.4%
ZI1.8%
PINS1.3%
SHOP1.2%
VYGVF1.2%
FUTU1.0%
< 1% Positions1.6%

Portfolio & Position Notes

After June ended and given the insane rally we’ve seen, I continued to trim some positions that I think have become too stretched in valuation that have historically seen some volatility after they reach a peak EV/S ratio. I also wrote covered calls expiring in January 2022 for some positions to earn some income, in case there is another market drawdown.

Voyager Digital ($VYGVF) and Futu Holdings ($FUTU) – I sold my entire position in Voyager Digital ($VYGVF) and Futu ($FUTU) because I simply didn’t know enough about these positions (largely due to laziness) and I wanted to consolidate my holdings even more and raise some cash. Plus, with $FUTU which is the “Robinhood of China,” I already made a quick 70% return in less than 30 days and figured I’d take some profits.

Cloudflare ($NET) – I generally don’t trim my positions a lot but one position that I struggle to build a large position around is Cloudflare ($NET). It’s just one of those stocks that continues to be simply too “expensive” in my book even though many people seem to love the stock and have built big positions around it. I personally just can’t due to historical baggage with companies that just had too lofty of a valuation before crashing due to a bad earnings report or something (i.e. Zscaler, Zoom Video, Crowdstrike, Beyond Meat).

The Container Store ($TCS) – I sold the majority of my position in The Container Store ($TCS) because I wanted to raise more cash and I just realized that I was “hoping” that things would improve for $TCS. While they have been successful in paying off debt, I think the Netflix effect is wearing off and I just think that my interest in “being right” about a value stock was making me hold the position longer than I should have. What I should have done was pat myself on the back when The Container Store rallied to $18+ and then proceed to sell my entire position for a nice hefty profit vs. watching it drop down to $13 and cursing the market for being so short-sighted. I always knew $TCS was a short-term position and a “value play” and I think I lost sight of that after the huge rally.

Doximity ($DOCS) – This company is labeled as the “LinkedIn for Doctors” and IPO’d a little over a week ago. I got in on IPO day and sold my position after a quick 33% return after just a few days. I definitely plan on starting a position again but I think the valuation got a little stretched after such a hot market debut. This little company is profitable, growing revenues at a massive 80% clip, their net revenue retention is around 150% which is insane and there seems to still be a lot of upside. I’m probably going to wait until it drops a bit more before getting back in, largely because I want to also see a quarterly earnings report and see how they do on the Q&A.

Enphase Energy ($ENPH) – This little solar stock has exploded in the past few years. I bought my entire position when it was in the $30-40 range and have been trimming it since I’m not an expert in the solar industry space vs. technology plays and I think the solar industry has a lot more legislative risk than other companies I invest in. It seems there’s been a big green wave the past few weeks due to Biden’s infrastructure plan, so I’ve been taking some profits to reduce my overall allocation since this is another one of those stocks that’s incredibly volatile due to legislative news vs actual earnings and I’m not super comfortable with it being such a big position relative to my other positions.

Zoom Video Communications ($ZM) – It took a few months, but it looks like Zoom finally got some love and had a nice little rally since the low $300’s. I’m super interested in their next quarterly earnings report where they’ll obviously report for the first time in a year YoY revenue growth < 100%. I think despite the obvious slowdown in revenue, Zoom still has a lot of upside but I’m keeping them on a short leash given their already large market cap and 2 quarters straight of sequential QoQ declines in revenue growth rate. Their current multiple of 33.3 seems reasonable to me given their 50% growth rate and this was exactly why I held on to my position since I thought the market was discounting their fundamentals.

Peloton ($PTON) – Looks like Peloton was able to get past all the negative press and the recall. They’ve had a solid rally since hitting a bottom in the $70s after their earnings report. They announced a corporate wellness offering that seemed to have been received positively. I am incredibly bullish on them even with the reopening after COVID. I just think it’s so much more convenient to have a Peloton subscription vs. getting ready for the gym. It’s also a lot cheaper in a lot of major metros than going to a gym. It will be interesting to see what they report in their next earnings release.

Watchlist

Asana ($ASAN) – I’m still incredibly annoyed at myself for not buying this when it was $47 after a solid earnings report. They’ve had a huge rally since their Q1 earnings report and I’ve only been cashing in slightly by writing a few puts in hopes of acquiring shares but that’s unlikely to happen given the market’s love for Asana. 

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