Last Week's Portfolio Update: +1.57% Up $8,045

Time got away from me and I couldn’t get last week’s update out last Friday. This week will be a little weird. Today we’re covering last week (week ending October 11th) and on Friday, October 18th, we will be back on schedule. I am considering moving portfolio performance updates to once a month which will give me more time to focus on covering individual companies. Would love to hear your thoughts/preference. Reply to this email and let me know!

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All results through October 11, 2019.

7-Day return: +1.57%Year-to-date return: +25%

Transactions: 0

Holdings & allocation %Alteryx (AYX): 19%The Trade Desk (TTD): 19%Twilio (TWLO): 16%Mongo Database (MDB): 16%Okta (OKTA): 7.6%Zscaler (ZS): 7%Anaplan (PLAN): 6.5%Pager Duty (PD): 5%Zoom (ZM): 3%Slack (WORK): 2.5%Datadog (DDOG): 2%Elastic (ESTC): 1.5%Crowd Strike (CRWD): 1.5%

Options: Short 1 x CRWD January 17, 2020 $60 Put Short 2 x PD Feb 21, 2020 $25 PutsShort 1 x ZM Jan 17, 2020 $65 PutShort 2 x ZS Jan 17, 2020 $45 Puts

I am also long some calls on NTNX and NKTR which are basically a lost cause. Big time losses on those.

What I’m thinking

For now, it appears most of the #SaaSpocolypse has passed us. I made that up, but it’s the best I can do to describe what happened to basically all of the companies I own (and most “high-growth” companies) over the last month or so. It was tough to watch my portfolio meltaway from being up more than 60% YTD in July to up around 15% YTD at the low point about a week ago. I view that as part of the game when it comes to this type of investing.

My belief that I am investing in some of the best companies in the world remains. I also believe that at least some of these companies will continue to grow for many years to come and reward investors handsomely. That’s why I stayed fully invested during the recent sell-off and why I intend to stay that way.

The Top 4

I’m very comfortable with my top 4 holdings (AYX, TTD, TWLO, MDB). I don’t plan to make any changes to them unless one surpasses 20% of our portfolio. Then I’ll look to trim it down to under 20%.

The Middle 4

I’m a bit less confident in the middle 4. Or at least in Anaplan and Pager Duty. I believe Anaplan is basically creating their own industry with connected planning and they appear to be a clear leader. But I want to see them execute well in the next quarter. I strongly believe in Pager Duty as well and the service they offer is critical to businessess where downtime costs hundreds of thousands or even millions of dollars per minute. However, I won’t buy any more shares until management shows continued strong performance in the face of the competitive environment that seems to be keeping pressure on the share price. Simon Erickson from The Motley Fool did a great Tweetstorm on the company recently which confirmed some of my thesis. Simon is a great investor and his vote of confidence is reassuring.

The Bottom 5

I am a big fan of pretty much everything about Zoom and plan to add shares over time (especially if I sell something else). There’s a lot of fear of competition and lack of moat, but I think Zoom’s numbers prove those fears wrong (at least so far). I do believe Zoom has a moat since they’ve built out the hosting capabilities for their cloud-first products since day 1.