Every three months-ish, I’ll go through my stock portfolio and review both the performance and my level of confidence in the company. Broadly, I’m a long-term investor which means when I make a bet on a company it’s with a 5-10 year outlook which makes this quarterly review a bit redundant - but it’s a fun way to spend a Sunday afternoon!
This time around I’m sharing it publicly and hope there are some interesting insights! We’ll look at the year to date returns rather than from initial investment, I like to look at returns and compounding annually but each to their own!
While I’m comfortable sharing the stocks I’ve invested in, I’m not comfortable (as of today) sharing the dollar amounts so I haven't included $ returns here, just % returns.
We’ll go through three categories:
Individual stocks - Companies I’ve bought and held pre-21
Index funds/ETFs - half of my investments go to these beautiful investment vehicles
New bets - Companies I've bought in '21
Key takeaways
My individual stocks portfolio outperformed the S&P 500 by >60% so far this year - woop! Honestly, my goal is to closely meet or beat the S&P 500 consistently and have fun doing it. Significantly outperforming like this feels unrealistic to do consistently.
I probably own too many individual stocks - 12 existing holdings, plus the 3 I added this year makes 15 companies I need to monitor. This isn't a heavy lift but I don't want to add much more and may shave positions to reduce cognitive burden.
The market really didn't like Spotify this year! In a year where everyone was up, being down 27.5% is pretty crazy.
Individual stocks
These are companies I’ve bought prior to 2021 and continue to hold through this year. The numbers I’m showing below are year to date return vs total investment return. I’ve also included a few very non-scientific reasons for why I invested/remain confident of their future prospects. I distribute ~50% of my monthly investments across these stocks (weighted based on growth expectations rather than equally).
Datadog - +54.94%
Engineering teams are arguably the most important team in every tech company, and every company is becoming a tech company. Their growth and net-retention numbers are best-in-class and every CTO I know is using them.
Google - +54.89%
Aside from the ubiquitous usage of their search engine and incredibly profitable ad business, they’re seeing great cloud growth and GA360 is the dominant analytics platform for most countries outside of the US. I also really like that they’re shuttering so many of the moonshot projects and getting the company focussed.
Cloudflare - +51.03%
Smart people I know use and love the product. There are a bunch of macro security trends I could talk about here to pretend but I bought the IPO because of positive sentiment from CTO friends :D
Microsoft - +29.51%
Have been bullish on Microsoft since Satya Nadella took over - very excited about Azure growth and Office365 as the default solutions for traditional Enterprises. Love this stock.
Facebook - +26.20%
Wildly profitable ad business - not much more to be said here. I do have questions about how they maintain dominance in the decades to come with an aging user base but it’s hard to argue with the numbers they put up.
Docusign - +15.75%
I bought the Docusign IPO because every single sales team I knew used and loved their product, during the pandemic their business has continued to accelerate.
Apple - +9.34%
Cash in the bank and the best brand on the planet. They are likely to be impacted the most by supply chain issues and the chip shortage out of all of the companies in my portfolio, but writing this on a new M1 Macbook wearing Airpods periodically check my iPhone it's hard to believe their dominance wains in the next 5-10 years.
Snowflake - +8.69%
Data access is like a utility bill for companies and the amount of data being collected compounds every month, as does the bill. Incredible growth numbers and net retention but also an incredible revenue multiple which has scared a lot of investors off (hence the low increase).
Nike - +3.66%
Second best brand on the planet. Had a tough yeah in comparison to previous performances and will likely be impacted by supply chain issues but still a great bet over the next 20 years.
Amazon - +3.09%
Arguably the most important company of our lifetimes. The commerce business is phenomenal, the cloud business is also the industry leader and growing at an impressive rate. Pandemic shoppers aren’t going back offline. Will need to watch how things change under Andy Jassy but Amazon continues to be a bet I’m very confident in despite the performance this year.
Disney - -4.79%
Another all-time great brand. I love Disney movies, parks, and shows. I cannot wait to take my son to Disneyworld, and might have to go sooner to check out the new Star Wars section! Disney+ is a great product with a strong catalogue and a ton of blockbusters planned for the next 12 months. I’ll buy and hold Disney forever.
Spotify - -27.5%
Spotify is the second app I download on a new laptop and the first I download on a new phone. I use it for hours a day and would continue to pay for my subscription if they increased the price 5x. Their podcast strategy is a phenomenal play and anecdotally has been adopted really successfully. I’ll continue to buy Spotify at this price and will look for them to take a bite out of ticket sales for in-person events post-covid too.
ETF/Index funds
The remaining ~50% of my monthly investments are evenly distributed across the below index funds. I love ETFs because they are balanced over time, which means that you don’t need to worry about selling/managing them unless you’re concerned about very large macro trends. My ETFs have a heavy concentration in technology given that tech companies make up a large part of the S&P 500 and the entirety of the second two. This works well for me given tech is my area of expertise, but it might be worth revisiting in the future.
S&P 500 (VOO) - +16.33%
The S&P 500 covers the top 500 companies in the US. Buying this fund is effectively a bet on the US economy, which feels like a good one to me.
Nasdaq 100 (QQQ) - +15.73%
This fund indexes the top 100 companies listed on the NASDAQ exchange, it’s primarily innovative technology companies. This is broadly a bet on the biggest tech companies in the US.
WisdomTree Cloud 100 (WCLD) - +9.46%
This fund is made up of more mid-sized tech companies than the NASDAQ 100. I like it because it captures a lot of great ‘upcoming’ tech companies which don’t make it into the above two funds.
New bets
I will occasionally buy stock in new IPOs if I’m excited about a company, they have to fit my thesis (I know the product well and/or know people who use it and love it) and so this is not particularly frequent. Also, taking on more stocks into my portfolio creates more work because I need to track and balance them etc.
Amplitude - +35.57%
As an early employee at Amplitude, I was fortunate to be granted stock options in the company - I didn’t technically ‘make a bet’ on Amplitude this year but it was when the company went public via a direct listing.
Gitlab - +8%
Much like my bets on Datadog and Cloudflare, this is a bet on the increased importance of the engineering organization and the tools they use. Gitlab is undoubtedly the second-place player in the market behind Github but it’s a huge market, Gitlab has awesome growth and net retention, and I think it’s going to be hard for Microsoft to maintain Github’s market-leading position over time.
Coinbase - +40.42%
This is really a bet on both the crypto market and Coinbase as a company. I am not any sort of crypto expert and so investing in Coinbase was my way of taking a broad position on the growth of Cryptocurrency.
Robinhood - +0.43%
There is a lot of negative sentiment around Robinhood but their product is the best on the market, they’re shipping awesome new functionality (the access to pre-IPO prices is an amazing one), and it’s hard to imagine that they don’t overtake Schwab etc. as the top brokerage long term. Charles Schwab has a 5x market cap vs Robinhood currently and so there is a ton of room for growth. Long term they overcome the negative PR sentiment and crush IMO.
Well that's it for the Q3 wrap-up, if people find this helpful I'll continue to do these reviews on a quarterly basis and share thoughts/observations. Ask questions in the comments or email me directly!