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No. of Recommendations: 141
I wanted to wait until all my portfolio companies had reported earnings before posting another portfolio update. CRWD and ZM reported results on June 2nd so now all my portfolio companies have their March/April quarters’ results in. Below I will show both the end of May results and the June 5th results.

April 30 update:


YTD Performance
GC port S&P500TR
Jan +25.7% 0.0%
Feb +27.7% -8.3%
Mar -2.9% -19.6%
Apr +16.7% -9.3%
May +64.7% -5.0%
Jun5th +67.4% -0.3%

2020 has been a wild ride. Below are some of the peaks and troughs of 2020 with the YTD returns shown.

02/18/20 +40.7% <<< YTD high prior to lockdowns
03/06/20 +21.9% <<< portfolio down 10% on the day
03/09/20 +3.6% <<< portfolio down 15% on the day; Fear index=3
03/11/20 +0.6% <<< portfolio down 8.8% on the day; Fear index=4
03/12/20 -11.0% <<< portfolio down 11.4% on the day; Fear index=2 (1 intraday)
03/16/20 -22.8% <<< portfolio down 18.9% on the day; Fear index=3
05/22/20 +61.0% <<< new all-time high (ATH)
05/27/20 +47.5% <<< portfolio dropped 15% (intraday 5/27) in 3 trading days
05/29/20 +64.7% <<< new ATH (end of May 2020)
06/03/20 +78.8% <<< another ATH; day after CRWD and ZM earnings

A wild ride is probably an understatement as the movements in the above table speak for themselves.

Below is the weekly portfolio YTD performance.

GC S&P Delta
01/03/20 4.5% 0.1% 4.4%
01/10/20 14.8% 1.1% 13.7%
01/17/20 19.6% 3.1% 16.5%
01/24/20 22.1% 2.1% 20.0%
01/31/20 25.7% 0.0% 25.8%
02/07/20 28.1% 3.2% 25.0%
02/14/20 39.8% 4.9% 34.9%
02/21/20 29.1% 3.6% 25.5%
02/28/20 27.7% -8.3% 35.9%
03/06/20 21.9% -7.7% 29.5%
03/13/20 -4.8% -15.7% 10.9%
03/20/20 -6.8% -28.3% 21.6%
03/27/20 -2.4% -21.0% 18.5%
04/03/20 -12.5% -22.6% 10.0%
04/10/20 3.1% -13.2% 16.2%
04/17/20 18.7% -10.5% 29.2%
04/24/20 20.5% -11.7% 32.1%
05/01/20 13.8% -11.8% 25.6%
05/08/20 37.7% -8.7% 46.4%
05/15/20 47.8% -10.7% 58.5%
05/22/20 61.0% -7.8% 68.8%
05/29/20 64.7% -5.0% 69.7%
06/05/20 67.4% -0.3% 67.7%


6/5/20 5/31/20 4/30/20 3/31/20
AYX 25.2% 27.3% 34.6% 38.3%
CRWD 23.9% 21.7% 20.4% 9.1%
DDOG 17.7% 18.0% 14.2% 11.8%
OKTA 10.7% 11.7% 14.9% 14.4%
ZM 8.5% 7.4% 10.2% 7.3%
LVGO 4.6% 3.6% --- ---
FSLY 3.9% 3.5% --- ---
NET 3.5% 3.5% 3.4% ---
PAYC --- --- --- 5.3%
TTD --- --- --- 4.3%
SMAR --- --- --- 3.5%
ROKU --- --- 0.3% 2.7%
GH --- --- --- 1.2%
Cash 3.8% 3.9% 6.3% 8.1%

The above allocations include my options positions. I still hold 2022 calls on AYX and CRWD.
For AYX, 75% of the value (in dollar terms) of the position is held in shares and 25% of the value is in options. For AYX, 55% of the controlled shares is shares and 45% of the “shares” are controlled by $90 and $100 January 2022 calls.
For CRWD, I was more aggressive after the Q4 2019 earnings report. Shares comprise 27% of the controlled shares and the LEAPs comprise the remaining 73%. The strike prices on these options are $50 and $60 with January 2022 expirations. The value of shares comprise 42% of the position’s value and the remaining 58% of the value is in the form of the LEAPs. Here is an example that explains how owning LEAPs (compared with shares) alters the payoff/return at difference stock prices:


>> Sold my remaining small 0.3% position in ROKU.

>> Sold about 15% of my OKTA shares ahead of earnings because the company is a slower grower and it had run up considerably.

>> Sold some AYX. At the end of April, the allocation was 34.6% and was temporarily high because I bought some temporary shares to earn a quick return on my cash. That trade worked out as planned (returning 14% return my cash in 2 weeks). I trimmed my remaining high cost basis shares after earnings, but AYX still remains my number 1 allocation at 27.3%.

>> Sold some ZM. During the month, my allocation dropped from 10.2% to 7.4%. In addition, I did a lot of options trading on ZM during May.

>> Bought more DDOG prior to earnings. The allocation increased from April to May because I added shares and the shares rose.

>> Bought LVGO (new position) after their earnings result and after some discussions with other investors.

>> Bought FSLY (new position) after their earnings result and after some discussions with other investors.


In addition to the AYX and CRWD (which I just consider share replacements/alternatives) options, I have been doing a fair amount of short-term options trading. I really stepped up the options trading activity recently. I won’t discuss the details here since it is off-topic, but mentioning it is relevant because it has been adding a boost to my 2020 YTD performance. I starting tracking my trades since 4/20/2020 and since then (through 5/31/2020), I have opened 79 new options positions. Only 9 of those positions are still open and the other 70 positions were closed out. So far in June, the options trading is focused mainly on CRWD and ZM.


All of the companies have now reported their March/April quarter results. I won’t go into detail on each, but I will give my summary takeaway for each. The allocations below are as of June 5th. The date next to each position is the day the earnings results were announced/released.

AYX 25.2% May 6
My opinion is as follows. The results for Q1 2020 were worse than expected. The long-term trajectory seems to be intact and the future continues to be bright. I see the pandemic a temporary speed bump for AYX. I expect AYX to get back on track quickly and since AYX’s valuation is low (IMO), I expect the stock to increase substantially (and perhaps more than my other holdings) after the economies open back up. I still think that AYX has the best long-term potential of all my positions.

FSLY 3.9% May 6
FSLY is a new position for me. The pandemic is clearly helping the company and next quarter’s massive acceleration (based on their Q2 guidance). I think that it’s likely that FSLY’s benefits from the WFH will endure. The valuation is low relative to some of the other companies in the portfolio.

LVGO 4.6% May 6
LVGO is a new position for me. I was not impressed when I first looked at the company several months ago. I didn’t think their business model was that strong. I’ve changed my mind based on growth they have seen, but the larger reason is that they have had success in signing up several major customers.

NET 3.5% May 7
For me, NET’s results were a bit disappointing. I expected more of a tailwind from the pandemic. The guidance is not that great either. However, NET has some important new products/services for which they are not yet charging customers. NET also has some “phantom” revenue as they are currently giving away some products/services for which they will soon charge. I am planning on holding through at least the next quarter’s result and then I will reassess.

DDOG 17.7% May 11
Wow! What a result. DDOG is on track and there was no deceleration (even slight acceleration). And given that last quarter there were only 2 weeks (out of the 13 week quarter) of WFH, there’s (IMO) a good shot they we will see another revenue growth acceleration next quarter. Aside from ZM, I think DDOG delivered the best overall quarter in this cycle.

OKTA 10.7% May 28
Just looking at OKTA’s financials, I would say it’s hard to tell that there was even a pandemic. At their investor day, OKTA said that they were seeing some headwinds from the pandemic/WFH. Revenue growth was steady as she goes and cashflow keeps improving. All my OKTA shares are in a taxable account so I am holding; if not for capital gains taxes, I would likely reduce my allocation to 8-9% due to a frothy valuation, but long-term I do want to maintain a position. Here are some thoughts I wrote about OKTA a few days ago:

CRWD 23.9% June 2
While I can’t complain about CRWD’s result, I was expecting an even better result. I expect that Q2 will produce another great result. I think CRWD might be possible to soon pass AYX as my largest holding.

ZM 8.5% June 2
Incredible. ZM is all grown up and has joined the ranks of the big boys. I listen to CNBC during market hours. In early 2020, ZM had radio spot commercials multiple times per hour. At some point, I think it was in late April or in May, there were no more Zoom Video commercials on CNBC. I think they probably discontinued commercials (perhaps they stopped advertising altogether) because everyone in the world who is not living under a rock is familiar with Zoom. I think that ZM will be worth significantly more in the next 12-18 months, and I plan on adding to my position.

After the last month, I wrote the following:

I believe this is a time during which great wealth can be built. We don’t see these kinds of opportunities often. That is my view. I realize that it is a scary time, and I may be wrong about some things. Everyone needs to do what is best for them, and I wouldn’t want to advise anybody. I’m only sharing what I see and what I am doing; everyone should do what is best for them. I have been adding risk, adding some leverage, and concentrating my positions into a handful. I know quite a few people who have gone to significant levels of cash. I would be very afraid to have a heavy cash position right now.

Holding a lot of cash going into May would have meant missing one of the best ever months of appreciation. My portfolio went from +16.7% YTD to +64.7% YTD in May. The month has shown that the digital transformation and cloud adoption has accelerated dramatically….at least that is what virtually all of our CEOs are saying that they are seeing. While some of our stocks are hitting or approaching all-time highs, I believe that this sort of run up is more than justified. When you see 2-3 years’ worth of adoption in one year, it pulls forward revenue and profits which makes the companies more valuable (just on a discounted cashflow basis); this type of pulling business forward also reduces risk and solidifies competitive positions of the winners. Our companies (at least the ones in my portfolio are winners because that is an important selection criterion for me) are all winners. It explains why I own DDOG and not ESTC. It explains (partially) why NTNX is not in my portfolio anymore. Looking ahead 1, 2, 3 years I see a strong probably of big gains….a doubling of the portfolio value in 1-2 years is not out of the question.

Some people are talking about moving from high growth into the companies that will benefit from the reopening of the economies. There may be another sector rotation and perhaps it begun this past week. I don’t know, but I do know that our companies are growing faster so in the end their stocks should appreciate more. I am not doing any rotating in my portfolio.

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