Portfolio Review - December 2020, +8.7%
2020 Total Return: 63.19% (+29.32% vs Nasdaq 100)
My stock portfolio is built around one central thesis - the digitalization of our world. I believe that,
The digitalization of our world is 10% complete.
This megatrend will continue for at least another decade.
I believe that this trend allows for outsized returns. That's why I invest a significant portion of my net worth into individual stocks. If you're interested in my monthly portfolio performance, deep-dives, and analysis around my holdings, feel free to subscribe below!
2020 finished with another strong month, +8.7%
After a short two month lull in September and October, the last two months of the year finished strong - the 2nd (+12.9%) and 3rd (+8.7%) strongest month for the portfolio performance-wise, only bested by +18.2% in March.
This has beaten my personal goal setting from all angles.
I am aiming for 10-15% per year on average over my long term investment horizon.
In any given year, I want to beat my benchmark by 5%
Both were easily smashed this year - the portfolio outperformed the Nasdaq100 by +29.32%.
A bit surreal, to be honest, but nice to see after I wasn’t able to outperform the Nasdaq in 2019.
This year I've set up my portfolio for the future.
I departed from several long term holdings and funneled the cash into younger, more exciting companies with high growth prospects.
After 20 years, I’ve said Good Bye to Cisco Systems and Oracle. I also closed my position in Netease, which I held for 12 years.
PayPal is now my “oldest” holding, which came into my portfolio after it was spun out of eBay. Amazon is also a mainstay and will continue to be for years to come. You can do worse than entrusting your money to the richest man on the planet.
I am not one for predictions but would be inclined to bet that AWS will be spun out in 2021, which would be a fantastic outcome for shareholders, in my opinion.
I also closed all positions that don't fit into my current strategy. Porsche, Starbucks, Disney, AT&T, ING Groep, and Activision Blizzard.
Instead, I now own names like DocuSign, Crowdstrike, Fastly, and Teladoc. The Nasdaq now more than ever is the comparison to evaluate my performance against.
These are all names with sky-high valuations. Still, I am confident in my ability as a long-term investor to watch them grow into these valuations and to realize the tremendous potential to create long-lasting earnings for shareholders.
That said, I would not be surprised to see 30-50% corrections in some of my names during 2021.
Overall, you can expect to see a lot less movement in my portfolio in 2021. The most likely scenario is that I will add to my existing positions when cash becomes available.
Companies that are on my Watchlist that I’d like to own at the right valuation are:
Airbnb
Cloudflare
Snowflake
Unity
Other companies that I am watching with high interest are:
Adyen
Etsy
Lemonade
Pinterest
Redfin
Zillow
Portfolio & Performance 2020
Portfolio: +63.19%
Nasdaq: +33.87%
All World Index: +5.3%
Top Performers - December
Baidu and IAC finally awoke from their year-long slumber and turned in stellar December performances.
Baidu presumably on the speculation that they may get into the car business whether this move is justified in that size, who knows.
I will say, though, that my investment in Baidu was always a play on the future. I am not interested in the legacy search business. I am interested in the AI possibilities. Whether that takes form through the self-driving tech or some other avenue doesn't matter.
IAC rose on the news that Vimeo may be spun out. It makes total sense, and you could see this from a mile away.
I posted this on Twitter back in September. IAC gets very little love on FinTwit. Only the “value” corner seems to be keen on it.
Current Portfolio - End of December
An eventful month despite only two changes in my portfolio.
Sold:
Slack
Pluralsight
Slack is getting acquired by Salesforce, and a Private Equity company will pick up Pluralsight in a deal that wasn’t spectacular for shareholders.
On the one hand, I am pleased that two companies in my “value” bucket were picked up in some sense that is validation for my thinking.
On the other hand, I would have preferred both as stand-alone companies and was very keen on following their paths over the next 5-10 years.
Oh well!
A few companies in my “value” bucket still remain.
Twitter is one. Nutanix and Baidu as well.
They all sport more reasonable valuations than most of the other companies in my portfolio.
Reluctantly I sold my positions in Slack and Pluralsight and am now sitting on a cash position that I don’t know what to do with yet.
If I get lucky, maybe the market will correct some of its highs while I do my thinking.
Top Performers - 2020
Of all the stocks I currently own, Square has been the star performer in 2020. I was cheeky enough to pick it up almost at the March lows.
Thank you for following my investment journey. I hope you found this useful, and here's to an exciting December!
Thank you for reading!
I want to share two links that allow you to invest alongside me.
Wikifolio:
If you are based in Germany, Austria, or Switzerland, then you can follow my Wikifolio. Once I publicize it, it would allow you to purchase a certificate through your broker that tracks my performance. Right now, you can watch it and can indicate whether you would be interested in investing.
EToro
My EToro portfolio, click here.
If you are based in Europe and are a user of EToro, you can copy my portfolio. This replicates all of my trades in your portfolio. Feel free to check it out if you like the thought of more free time and me doing all the work for you.
Thanks for the insights!
How come the list of stocks from the pie chart do not match the stock list in your etoro portfolio? For example AMZN and SQ are not in your etoro portfolio.