My August Returns Are In!... And The Good Trend Continues
Retirement Portfolio
In August, I opened two new positions in $NET and $PCOR. I added to three times to $MKL , $TYL, $MCD, and $WM as part of my 401k DCA and added to no other positions. Another relatively quiet month. I also added to $JPM, $AAPL, $SBNY, $COST, $O, and $SBUX via DRIP. I exited $MTCH and sold 32% of my shares in $BMBL.

My retirement portfolio was down 2.54% in August but that was less than my benchmark SPY portfolio (down 4.41%) and benchmark QQQ portfolio (4.51%). I'm now down 37.40% YTD compared to my SPY benchmark at 16.52% and QQQ benchmark at 21.72%.

My best performing retirement positions YTD:
  • $SWAV is up 96% YTD
  • $EGIO is up 17% YTD
  • $WM is up 14% since I started buying a couple months ago

My best performing retirement positions in August:

My top 10 positions now make up ~35% of my portfolio. The top 6 remain in the same order of $MELI, $AAPL, $AMZN, $F, $GOOGL, and $SHOP. $SWAV jumped up from 9th to 7th after a great month with great earnings with $NVEE, $SIVB, and $COST rounding out the top 10.

Looking forward to September, I'm contemplating exiting my $SQ position. I'm turned off by Jack's comments and his insistence on $BTC.X being the be all and end all. I don't mind the crypto exposure but the Bitcoin only hardline is narrow-minded in my opinion. If you made me czar, I'd actually just have Square exit their crypto entirely and focus on what they're good at.

I'm also considering exiting $MMM in my 401k and replacing it with one of $ABBV, $BEP, $DEA, $HSY, $MKC, $MTN, $TGT, $TROX, $UNP, or $UPS but I need to research them first before deciding.

Taxable Portfolio
In August, I only added to $DT. No positions in this brokerage pay a dividend so there was no DRIP and I did not exit any positions.

My taxable portfolio had a second great bounce back month, up 9.56% after being up 13/67% in July. My benchmark SPY portfolio was down 3.64% and my benchmark QQQ portfolio was down 4.18%. I'm now down 30.15% YTD compared to my SPY benchmark at 14.84% and QQQ benchmark at 21.43%.

My best performing taxable positions YTD:
  • $TMDX is up 172% YTD for me. Wowsers.

  • $MSP with a 39.49% return YTD - RIP as is had such a great return because it was acquired.

  • That's it. None of my other 14 positions are positive. Whomp whomp.

My best performing taxable positions in August:

My top 10 positions continue to make up ~90% of my portfolio as I only have 14 positions in this brokerage. The top 10 remains basically the same with $SNOW, $TMDX, $ATZAF, $SILK, $DT, $LMND, $NCNO, $CPNG, $OM, and $BIGC.

Looking forward to September, I already added to $ATZAF as my monthly add. I don't expect to make any other moves but we shall see.
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My $MTCH $BMBL $PCOR $NET trades
These may be famous last words but I don't believe Match will be a market beating stock over then next 5-10 years. Margins have been worsening since each year since 2018, paying customers and revenue per paying customer has been declining QoQ, and there's now a growth-by-acquisition feel which I never am a fan of. At this point, I feel Bumble has a better chance of exceeding market return overs the next 5-10 years then Match does and I also feel the new positions I put the Match and Bumble money towards ($PCOR and $NET) are far more likely to be market beating positions.

Match Returns
Time held: 3.45 years
Total / annualized return: 5.14% / 1.84%
Total / annualized $SPY return: 37.31% / 11.59%
Total / annualized $QQQ return: 62.41% / 18.32%

On Bumble, I took advantage of buying the dip. I picked up additional shares in early March at $16.72/sh. I sold those shares at $34.58/sh (this trade didn't map over to Commonstock) to put towards $NET and $PCOR. I'm still cautiously bullish on Bumble and will be watching their Bumble growth closely.

For my new position in Procore, I see a high margin SaaS business (in an industry that desperately needs this type of company) with a lot of operating leverage ahead, accelerating growth in their large (>$100k ARR) customers and strong but not spectacular DBNRR and DBGRR. I don't expect them to growth revenue at 35-40% every quarter but I think 15-25% is reasonable for the foreseeable future. Their likely will be valuation compression as revenue slows but over the next 10+ years, I think they'll do just fine.

Metrics I track on each non-core holding buy:
P/S - 14.6
Forward P/S - 10.5
PSG - .26
P/FCF - Negative
P/GP - 18
Rule of 40 - 28%

We all know about Cloudflare. Revenue growth YoY exceeding 50% for 8 consecutive quarters now is usually the headliner. I think they'll be FCF positive, or really close) in their FY24. Like Procore, they have operating leverage ahead of them and hopefully start pulling those strings a bit soon. A DBNRR of 125% in this recent Q, up from 119%, and management has a stated goal of getting that to 130%. They're also growing their largest customers at an incredible rate still (71% in 2021 which makes 5 years of growing >$100k customers at >50%). I'm watching headcount to make sure they don't hire just to say they hired. Employee growth grew at 36.5% in 2021 which was their slowest growth since data is available (2017). I already own shares in $OKTA, $ZS, and $CRWD and with the importance of cybersecurity and the likelihood of that continuing, I have no problem adding $NET as well. As many people have said, if a company needs to cut costs, the odds that they cut their cybersecurity expenses will probably be low.

Metrics I track on each non-core holding buy:
P/S - 31.8 (whew)
Forward P/S - 19.6
PSG - .39
P/FCF - Negative
P/GP - 41
Rule of 40 - 41%
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Weekly Buys
This week I looked into $PCOR after hearing about it on The Motley Fool Money. Procore is a cloud software for use in construction management. It's a great way to connect everyone that is working on a job.

I personally use this service at my day job, it works great for us as our main office is in Fort Worth, Texas , but we are also doing work in Austin and Houston. My coworkers that have been in the business far longer than I have said they would have invested already if they knew lol, so I told them now is a great time. I decided to enter yesterday with a single share.

$BTC.X dropped by a good amount today, I put the ~$37 in cash I had on Strike into it, if it goes down more I may buy more, if it goes back up, well good deal.
Glad you made a decision. Don’t know much about PCOR but you seemed like you did your research. Good adds
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YouTube is still a novel source of alpha
"The person that turns over the most rocks wins the game" - Peter Lynch

Successful investors will agree that synthesizing data is more important than collecting data. Retail investors have never had a more powerful toolkit to compete against the pros but are still undoubtably disadvantaged when it comes to access to data.

I've touched upon this idea before in my post about Alternative Data. If you're diligent there are clues all around us, insights that artificial intelligence can't (yet) decipher by simply scraping a website's text. You can watch advertisements on TV or notice what companies are benefiting from free advertising on social media.

I'm circling back on this idea because it really seems like the modern version of turning over rocks is to watch random YouTube videos. Just pretend you're a portfolio manager and find videos where someone is pitching a stock to you. You can trade a few minutes of your own time to hear their synthesized conclusion after hours of research.

Behind the scenes @nathanworden and I are spending hours each week to prepare an investment discussion on a single name. By presenting our ideas publicly it forces us to think clearly and opens us up to criticism which only helps refine our conclusions. As a viewer you're the PM and we're your analysts.

Another example is this random channel sharing webinars on how to use $PCOR software. The combination of such deep product insight & the average video having like 20 views supports the notion that there are still a lot of rocks to be turned over. You could know the Procore software cold after watching just a couple hours of his webinars. All of this is available to us for free!
Love this analogy— do you tend to seek out YouTube channels with less subscribers and views because you know the ideas in that video are relatively undiscovered?
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Another Drawdown! Another Opportunity!
Stay Strong, Stay long, the businesses we own are still kicking ass!

Selling means you were wrong about their long-term potential!

Sell if you feel fundamentals are weak, not due to price action.

Price is a number, business is true value!

I kinda like $FRSH $PLTR $TWLO $CRWD $TEAM $GTLB $PCOR $VEEV $OKTA at these prices
A great reminder !

“In the short-run, the stock market is a voting machine. Yet, in the long-run, it is a weighing machine.’

$CRWD is definitely one business I need to look more into at moment at this price.
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New Position: $PCOR
$PCOR is a SaaS Construction industry leader with a unique highly integrated, open, and extensible platform that enables businesses to accelerate and manage their entire construction projects and enables them to move very fast and save them a lot of money along the way. They have moats with their platform integrations, products portfolio, innovation, and have a proven acquisition strategy. Procore is a high-growth, break-even business with a large runaway for further growth.

I wrote a brief about them on my old blog, will publish an update this year.


Also, subscribe to my new blog for the latest updates - https://www.moderngrowthinvesting.com/
2021 was a great year for me, Thanks for supporting me!
Looking back at 2021, here is a list of some of the best ideas I have written about $BLND $HIMS $SEMR $SMWB $EJFA $ZIP $PCOR $OLLI $JAMF $FROG $SQSP $OLO

Let's Look at these, one by one:

Also, I own all of these, I share my portfolio here - https://moderngrowthinvesting.com/tag/portfolio/

Subscribe to https://moderngrowthinvesting.com to follow my work and portfolio.
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