Quick update with my transactions from yesterday. The portfolio is sitting right around 13% cash, but I intend to start a 5% position in Zoom. That will bring my cash position down to around 8% which I’ll probably keep and use if any opportunities present themselves (I’m looking at you Atlassian (TEAM) down almost 8% after a GREAT earnings report…we will see).
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I just moved the podcast over to Anchor. It can still be found by searching “Founder Stock Investing” on your favorite podcast player, or by going to this link: https://anchor.fm/founderstockinvesting
Why I sold DOMO, SMAR, GH, and ABMD
Guardent Health (GH):
Buy date & price: December 6, 2018 at $41.44
Sell date & price: April 17, 2019 at $69.80
So during the roughly four months I held the stock, it returned 68%. Pretty good!
Out of all four of these companies, GH is probably the one with the most upside potential. However, because of the nature of the biotech industry, it’s also probably going to be the most volatile and risky. The bottom line is that I’m a huge fan of the company and what they’re doing. I want them to succeed because it means cancer patients will likely have better outcomes. But I just don’t know anything about the biotech industry and there are so many regulatory hurdles. So as an investment, I’m holding off for now.
Buy date & price: December 6,2018 at $279.54
Sell date & price: April 17, 2019 at $260.66
During the four months I held the stock, I lost 7%.
Abiomed will probably be less volatile than GH, but it still falls into the medtech/biotech category which I just don’t know anything about.
Domo (DOMO) and SmartSheets (SMAR):
These were both tryout type positions and I even talked about not being as comfortable with them as with my other investments. So I decided I don’t want to compromise and lower the quality of my holdings (in my opinion) just to own more companies. We don’t have to own a bunch of companies and I want to own only my best ideas. Neither of these companies is growing sales at a pace I’d like to see given their size and age. They also spend significant amounts on marketing and sales which is something that I believe the absolute best products don’t need.
An Update on Our Other New Positions:
Pager Duty (PD):
We bought 300 shares of PD on IPO day at $ 36.97 which many recommend against. Often, it’s a terrible idea to buy on IPO days. However, I wanted to own a small piece of this company because I believe the future is very bright. I will look to add as the execute and prove themselves as a public company. The position is currently up 9% since we bought last week.
We bought Atlassian last week as well and our shares are currently down by roughly 9% after they reported earning yesterday. The stock has taken a hit in after hours trading. The earnings report looks great. No idea why the stock is down, but when stocks are down for reasons other than our companies struggling, I look to add more. I probably won’t add yet because a 10% drop is almost meaningless, but if it were to drop another 5%-10%, I’d seriously considering adding.
That’s all for now. As always, thanks for reading and please send all your likes, feedback, and friends or family our way!
Have a great day,