Portfolio Summary
Note:
% of portfolio uses market value.
Cost allocation denotes my cost basis as a % of full position size. 100% means it is a full position, whereas 100% + denotes an overweight position. I have recently lowered my cost allocation $ as I foresee I will have lower contributions in this coming year.
My performance:
Since inception (Feb 2020):
Portfolio: 50%
US Tech 100: 38%
Adds: ROKU, LMND, NVDA, MP, CRWD, TWLO
No Sells
For February’s portfolio analysis, click here:
That said, a live summary of my portfolio in March:
Dilemma
As a long-term growth stock investor, how do you grapple with timing the market and long-term investing? Because I think readers would have known the catalysts by now:
Bond Yields
Rotation to value plays
Potential risk-off sentiments (see fear of France going back into lockdown on 31st Mar, literally anything can be a risk-off event with knee-jerk market reactions)
The catalysts were clear, to me anyways. I had 2 choices: to sell/hedge my holdings or to buy the dip. I think my portfolio additions is indicative of my decision.
However, being objective, hedging your holdings would make so much sense. Why should we go through large and unnatural broad-market drawdowns? I have considered this notion infrequently during my amateur investing journey, mostly influenced by Puru.
It is around 930PM local time when the US market opens. I sleep around 1130PM (does good for your body if you sleep at a defined time period everyday), and I would throw up a little at having to stay up all night just to decide if I want to hedge my portfolio or not.
Before I continue, you are right. Do what works best for you, and what makes you sleep soundly at night. That is very underrated. However, I would rephrase: Do what makes you achieve your objectives.
My objective: To get outsized returns over the long term.
Hedging your portfolio is something that is quite uncommon among retail investors. However, I think we can all agree that successful hedging in times of unnatural broad-market correction (i.e. no negative news for your stocks) can provide much needed capital at the bottom, outsizing your portfolio returns.
Of course, my knowledge of this is at level 0, but over time I plan to at least devote time and effort to learn this. Investing is a skill that takes time (amongst other things) to learn and master. So is hedging. Hedging, like it or not, is an insurance. Most of the time it costs you money, but the times that you really need it…
Buy the dip… but the dip kept dipping
In March, I have been defaulting to ‘buying the dip’. My buys here:
ROKU: $416, $357
LMND: $108, $92
NVDA: $474
MP: $39
CRWD: $181
TWLO: $313
I am thankful that my employer is in a healthy position financially - I got my performance bonus and put it to good use. Immediately though, with prices as they are now, you would correctly judge that some buys are premature. The name of the game is patience, and at least I stuck to what I had said in Feb here, to some extent. We also can’t predict the future so there’s that (maybe a bias to convince myself to make the purchase then).
$ROKU: The first ROKU buy was when it annouced that it was acquiring Nielsen One. I felt impressed that with this move they were expanding into Linear TV (as well as expanding their TAM). It was also 15% off its highs, so I bought it. 2 days later, I bought it at 24% off highs. The stock is currently approaching 200DMA which would be in the 260 - 280 range, which is a 40% off highs.
Conclusion: Should have been patient.
$LMND: I started the month with a starter position which is 20% of a full size, cost basis $120. Of course when the stock plummeted from its $190 highs, $108 and $92 (48% and 54% off highs) seemed such a reasonable buy to increase my positions.
Conclusion: Momentum stocks can fall further than you have cash to ‘BTD’.
$NVDA: Bought it when it briefly dipped to its 200DMA. It was a good buy imo, though it is still 20%~ off its highs. Will look to add in the future if I get the chance at lower prices.
Conclusion: Good buy$MP: Also a starter position like Lemonade. 20+ % off highs + the fact that it touched its 50DMA made it seem like a good buy.
Conclusion: Same as Lemonade.$CRWD: Have checked the chart on the day of my purchase. The high for that day was $181.50, so I literally bought the top. 28% off highs for a stock that’s executing really, really well? I would take it anyday.
Conclusion: Good buy.$TWLO: Finally started a position in Twilio, a company which has been similarly executing really, really well. It is a good company, and I don’t think I can wait any longer to start a position. The last day of March just opened, and Twilio is up a decent amount from my buy. Can’t compain.
Conclusion: Don’t wait too long for the right prices. We might miss it.
You’ll realise that I keep harping about xx% off highs. If you think about it, that’s classic anchoring bias. Our decision making is framed around the highs, naturally, we expect a 25% discount to be quite the bargain. Of course, when the stock has just doubled or tripled, perhaps patience does pay off.
Moral of the story?
DO NOT GET SUCKED INTO FALSE BELIEF THAT STOCKS CAN GO 100% IN A YEAR AND STILL BE NATURAL
With the resources that I had, I think I did average, some decisions were good, some were bad. In the long run though, these decisions would ‘turn’ good, if the company continually executes and the share price reflects that.
Nobody likes rough patches. That’s why they are rough. Just like screwing up at work big time, life doesn’t stop when we get punched in the face. The immediate few steps will be excruciating, but we have to make that step forward. After all, we are supposed to look into the future, and not back on the past.
To the moon 🚀🚀🚀
On the 29th of March, my portfolio was sitting at a -13.5% YTD. I am grateful that buyers decided to show up just as March rolled over. Looking towards April, what should we expect? Consistent green days?
Its always counterintuitive; we want red days to go as soon as possible, yet when green days come around, we want red days to come back. This is why I try to focus on the psychology aspect of investing. Honestly, it really isn’t difficult to identify great companies, be it by growth rates, large TAM, secular tailwinds, or first mover. However, where shall we buy in? How can we ladder our buys? Do we get sucked in to the hype of the company being “the next amazon”, or “the next Sea Limited”?
I think I have done a decent job at separating emotions from decision making (have I?) , but the fact remains. The greatest enemy is always yourself (human biases), and forever will be. The decision you make, are made by you, no one else. Accountability is the name of the game. We are responsible for our own actions, and our returns.
We get the returns we deserve.
While we will eventually reach the moon, it is the challenges along the way that test our resolve and perseverence. This month was one such challenge, and reflecting on this, I think I probably deserve a B or B minus grade.
This is also why mental models are important. If we keep reflecting and learning from our mistakes, our mental models to investing will improve, and will perhaps emulate the greatest investors that we learn from. For a deep dive, click here.
For now though, time to read 🤓. Arrived in the mail few days ago, I am confident it will be a great book.
Books contain information, and when absorbed properly, become knowledge. Knowledge, when applied correctly, become power.
Cheers,
Joey