August Portfolio Update!!

$SPY: +7.93%
My Portfolio: +56.50%

Beating the market by 48.57%!!

Largest Positions:

$AMZN - 10%
$NVDA - 8%
$CMG - 7.6%
$AAPL - 7.5%
$MELI - 7%
$TTD - 6%
$FB - 5%
$TDOC + $LVGO - 4%
$SQ - 4%
$SE - 3.5%
$DOCU - 3.2%
$SHOP - 3%

(Thread)

New Positions and Why:

(1) $ARKG - bullish on the trend of CRISPR and gene therapy, $ARKG offers exposure w/o requiring advanced knowledge of the tech.

(2) $NET - a rapidly growing web infrastructure & security services co., $NET has a huge TAM & strong gross margins.

Added Significantly:

$SE, $LVGO & $TDOC, $RDFN, $STNE, $ETSY, $DOCU

Closed Positions:

$MDB - small position that I didn’t understand well; reallocated funds to $DOCU

Last month, I talked about time horizon and the value of holding for the long-term in my update (see below). This month, I want to talk a bit about my evolving portfolio strategy! https://twitter.com/ztinvesting/status/1289596338577895425

(1) Concentration - I currently hold a diversified portfolio with just under 40 stocks (~15 positions under 1%). I have a unique strategy, which works for me, and I recently have tried to concentrate my portfolio more into my highest conviction stocks.

As Buffett says, if you have the LeBron of stocks, you shouldn’t be investing money into your benchwarmers. Now, I don’t necessarily believe I need to cut my portfolio to 10 stocks.

I have a lot of positions - $TMDX, $SPCE, $SFIX, etc. - that I don’t have the conviction to put > 1% into yet, but that I like to follow along with and keep in my portfolio. If they fail, so what, but if they succeed, I’ll be paying enough attention to be in early.

Furthermore, I have a couple of stocks - $DIS, $COST, $CMG - that aren’t providing jaw dropping returns. However, I have to remind myself that investing isn’t just buying a symbol, it’s buying part of a business. I LOVE these companies, so I own their stock, simple as that.

Nonetheless, there are a few companies in my portfolio, like $MDB, that occupy small positions, I don’t understand well, and I’m consequently not super bullish on. These are positions that I am gradually eliminating, so I can at least be at > 3% concentration in my favorites.

(2) Coffee Can - While I want to be concentrated in high-growth, exciting companies, there are some leaders (mostly the biggest holdings in my portfolio), that I want to hold for decades to come. I don’t want to be tempted to sell them, and I don’t need to add to them.

Thus, I don’t really pay that much attention to these stocks - $AAPL, $AMZN, $FB, $TTD, $NVDA, $MA, etc. These are my “Coffee Can Stocks” (see great article below). https://www.woodlockhousefamilycapital.com/post/compounding-coffee-cans-and-more

By “Coffee Can Stocks,” I mean that I will hold these companies for the long term without paying much attention at all to their day-to-day movements. If I didn’t check my portfolio for 10 years, I suspect these companies alone would still be big winners.

(3) The Result - Even though my portfolio is comprised of roughly 40 stocks, it feels much more concentrated. I have my ~10 Coffee Can stocks that I don’t pay much attention to + my ~15 <1% stocks which I passively follow, which make up a combined ~25 stocks of my portfolio.

This leaves me with 10 or so stocks that I actively follow and am adding to. I get the benefits of holding speculative companies; I get to hold my favorite companies, and I don’t feel like I’m doing any more work than someone with 15 stocks.

This is the beauty of having your own portfolio strategy. This strategy definitely wouldn’t work for everyone else, but it works for me, so I am happy with it.

Thank you for reading! Would love to hear thoughts and comments! Excited to see what September brings! :)

And as always, thank you to those on this platform who have given me so much wise knowledge! All must follows:

@BrianFeroldi @TMFStoffel @hhhypergrowth @saxena_puru @dannyvena @richard_chu97 @JonahLupton @jablamsky @KermitCapital @RedCoatChicago @CathieDWood & so many more!!