Nick's avatar
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What to do with all this cash?
Last week, I trimmed some $CELH (tempted to trim some more before earnings, since I almost top ticked it). I also sold my $RVLV position after bad earnings, and $AVLR after the buyout was announced at basically the stock price. Between these sells (and rare Ws) and my payroll contribution, my cash balance is higher than it's likely ever been.

Unfortunately for me, I don't trust this rally and feel like we have another move down, even just back to where we were a few weeks ago, not necessarily new lows. But patience is not my strong suit by any means, and life has gotten in the way of research and studying, and I haven't quite thought out my process like @scorebdinvestor to systematically identify potential targets (it's in progress, I swear).

So what the heck do I do with this cash? Sit on it? S&P index until I figure out what to buy? Dilemmas dilemmas..
It's always tough to know what to do with cash. Usually, I like to know what I will do with proceeds before I get them. IE, if I am selling this stock, will the proceeds be utilised in a superior way, for a superior opportunity?

But life doesn't always work out that way, and sometimes the need to sell something comes before you have time to examine what will be done with the cash you raise as a result of selling.

One thing to note, don't be in a rush. Whilst cash is a terrible place to have capital in the very long-term, there is nothing wrong with holding some in the short-term.

Below are some quotes from Chuck Akre on holding cash that you might like:

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July Competition Idea -- $RVLV
I'm going with Revolve Group for the Commonstock competition.

This thing is a consistent 20% compounder with expanding margins fetching an earnings multiple around 20X.

As a consumer discretionary e-commerce play, many are worried about how the next several quarters will look. To me, this is a special exception and will buck the negative trends analysts are currently assuming.

Here's why:
  • The company caters to a highly affluent consumer far more durable to economic fragility than other cohorts. Its demand trends were exceedingly strong even into May 2022 as a result. Economic cracks had already begun to form and deepen by then.
  • Yes it's an e-commerce player, but we have to explore exactly what type of e-commerce player it is. The firm sells clothing people wear to "look and feel their best." This takes the form of fancy dresses for a party or festival as a primary example. Social distancing greatly diminished demand for this nice, and it's now coming back with full force. Speaking of festivals, that's primarily where Revolve does its marketing. So these events returning is allowing it to normalize its customer acquisition cost and user growth.
  • The team is nothing short of elite. I readily rip on executives of my own holdings for under-performing... this team hasn't given me the chance. Despite demand collapsing during the pandemic, it managed to stay exceptionally nimble with data-driven inventory which freed it to expand margins. It sees a lot of this expansion as permanent to now coincide with the demand growth tailwind.
  • It shatters top & bottom line expectations every single quarter.
  • Now, Kendall Jenner has been brought on to be the creative director of its FWRD brand. To me, that merely pours more gasoline on the momentum fire. She's 2nd to none in terms of fashion ubiquity. FWRD has taken more market share in its luxury niche since 2019 than any other competitor and is now becoming a larger and larger piece of the pie while continuing its rapid growth trajectory.

This is an e-commerce player, but a unique one. The pandemic was NOT good for this company, but it's lumped into that aggregate beneficiary bucket. I'm excited to see how Wall Street reacts to its 2022 results.

Go Revolve.
I try to think about my portfolio in terms of the strategy I had in mind at the beginning of the year. On 1/3/22, I had large positions in Cathie Wood stocks like $TDOC, $COIN, and $TWLO. We all know what happened to Cathie’s stocks. They have been the worst performers. COIN being the worst, down 70%. I still hold them, however. I haven’t completely lost faith.

Earlier in the year, I stated that I wanted to build heavier positions in MSFT, GOOG, and META because I did not think they would be affected as much by the economic downturn. I did indeed build up heavier positions in $MSFT, $GOOG, and $META as can be seen on the chart. META would be in a higher position but is down significantly on the year. I do believe that META is attractively priced right now.

Another thing I mentioned earlier in the year is how I was heavy in ecommerce and fintech. My ecom and fintech holdings are down significantly. I haven’t sold, still holding on. I am slowly accumulating. $ETSY and $UPST are some of my favorites for these areas. Also, like $RVLV.

I did add what I consider to be safer positions to my portfolio in an effort to preserve value. These types of additions included $UPS, $UNH, and $CNC. I am either up a little or down a little on these. They’ve done the job I’ve asked of them.

Back in January, I also said I would slowly keep buying Chinese stocks. Interestingly, these are my best performers for the year. $FUTU up 38%. $VIPS up 19%. $PDD up 27%.

A few weeks ago or so, I did some panic trading. It was hard to think clearly with all the down days. I was in and out of a few stocks over a period of a few days. I’m at a better place mentally now. I’m going to stick to my convictions. Will my strategy work? I don’t know, but I’m enjoying the process of learning and growing as an investor. Green days inspire hope. Red days are instructive and build discipline.
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April 2022 Bloodbath - Names Down >30% Since April 1
April 2022 was one of the worst market months of all time. In fact, it was the worst since October 2008. Here are 100 stocks down >30% since April 1:


Visit highsandlows.substack.com
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Yeti looks interesting to me here. 15-20% grower, 19X earnings, 12X EBITDA.

I've always loved everything I've purchased from them.

The team fared a lot better than others in terms of margin maintenance amid the supply chain/freight issues in 2021.

The 2022 guide looks good.

Seems to have that cult brand potential. Reminds me a little bit of $RVLV -- another holding of mine.

Negative/positive thoughts on this one?
Whoa, didn’t know they’d gotten this cheap.

Always loved their brand power, but was too scared to overpay.

Need to look at this one again in more depth.

I’m curious if they can move above and beyond their niche like Red Bull, or if they’re going to be limited on what they can expand to.
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I think $RVLV leadership is among the most underrated group in markets.

It managed to briskly expand margins while demand collapsed due to:
  • selling going out clothing
  • largest marketing channel is live events like festivals

… & is now taking advantage of the rebound while maintaining share gains it made in the pandemic categories it pivoted to.

It foresaw the supply chain crisis 9 months ago & planned accordingly to avoid ANY issues.

& now Kendall Jenner is FWRD’s new creative director.
Hi Brad thanks for sharing this . I was aware of $RVLV only because of my experience as a consumer however after reading your post and having a look through their investors relations page and I think it’s one I am going to add to my watchlist !
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Gannon Breslin's avatar
$192m follower assets
A big part of investing is missing 10 bagger investments

It use kill me knowing how many I sold too early or outright missed

When I started to focus on educating and preparing myself for the future is when I finally got one

One right now for me that I am trying to not think about is $RVLV (sold at $26) after a well over 100% gain

Old way of thinking: I sold to early and got unlucky

New way of thinking (and harsh reality): I sold too early because I didn’t understand the business enough
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