Random Portfolio Update

It’s been a crazy year so far. I was up as much as 40% to kick off the year and then bottomed on May 13th down ~28% or so. Since then, my portfolio has rebounded over 50% and is now at 13.5-14% YTD vs. the S&P 500’s 13.1% YTD, so beating the S&P index by a tiny bit.

Who knows if growth stocks and my portfolio will continue to climb after the huge run we’ve seen. There’s a lot of FUD out there about another 10-20% correction coming or that inflation this time around will not be temporary but will be more similar to the 1970s.

I try not to worry about the above, while macroeconomic factors are definitely something to consider, it’s not something I have too much control over. What I do have control over are the stocks that I invest in and the allocations I make into those individual stocks. With that said, the majority of my portfolio is invested in strong companies that have the following characteristics:

  1. Growing revenue at a rapid pace (Generally 30%+)
  2. The majority of my positions have some sort of recurring revenue component which mitigates some downside risk when there are demand shocks
  3. High gross margins
  4. Have little to no debt
  5. Not a super large-cap (besides $NVDA), so there’s room to grow

These companies should continue to generate strong returns despite market volatility and as the old saying goes, “Time in the market > Timing the market.”

Quick Portfolio Update

I trimmed more Pinterest ($PINS) since I’m not convinced that they’ll be able to monetize their platform as aggressively as I thought they would be able to (slowing MAU growth is never a good sign). I also trimmed $SKLZ since I’m trying to consolidate my portfolio more to my most confident positions. Bought a lot more $FVRR, $ZI and $UPST.

Finally, I trimmed more $SPT in the mid-high $80s. It’s not that I don’t believe in Sprout Social, in fact I think that they are an awesome company, but I do think their EV/S (~32 currently) multiple has expanded a bit much given how fast their revenue is growing and I wanted to diversify my holdings a bit given the size of my $SPT position. I also wrote some covered calls in the $110-$120 range with a January 2022 expiration. I figure if it hits that range, they will have a 35 EV/S multiple based on my forecast of their revenue growth, which is higher than Zoom Video’s current EV/S multiple and I would be fine selling my shares at those prices.

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