Victor Pedersen
Edited
(Part 2/2) $ZM (Zoom Video Communications Inc) I have added additional shares as I believe that hybrid work-from-home is an important trend for the portfolio. The shift away from in-person meetings is expected to continue and Zoom is a clear winner in this space. It remains a high-quality company with strong growth and cashflows and also appears to be undervalued relative to other SaaS companies. Zoom is also spending its cash to encourage developers to build on its platform, which is a tried-and-true approach to innovation. The stock market is doubting Zoom yet they have $5B cash to expand the product lineup and market share. Microsoft recently unveiled a cheap standalone version of Teams. If you can’t beat your competitor in terms of quality, then I suppose the last resort is to try and squeeze them in a price war. Whatever the outcome, I feel confident about having both Zoom and Microsoft in the top 10 holdings. $ROKU (Roku Inc) A rather new addition to the portfolio and one that was clearly added too early. Despite strong Q3 revenues and improving user monetization, the shares continued to drop lower and lower. Currently, there’s a lot of short-term noise around Roku including short-term price swings and analyst ratings/price targets. Longer-term, the company is on a great trajectory with solid growth in its business metrics and strong financials. Even with heated up competition, Roku still retains 31% market share of the big screen and they are unlikely to give it up anytime soon. Roku has considerably bigger ambitions on the original content front, with plans to develop more than 50 original shows in the coming two years. It's looking to better monetize the 155 million people living in Roku households - about half of whom currently watch The Roku Channel. This is a great move, as Roku sells less than 30% of the ads for other apps on its platform, but 100% of ads for those watching The Roku Channel. Roku is oversold, currently down more than -55% from all time high and represents strong value in a booming streaming industry Overall, I have continuously added strong growth names that continues to prove themselves. These stocks have taken a massive hit as investors prepare for a 2022 with more emphasis on net income, that is to say profit here and now, rather than growing revenues. There are a couple of more stocks to talk about but as you know these have been the most impactful ones to the portfolio recently and certainly not in a positive way. Personal note: I’ve been quite sick lately, and not the kind where you get to stay at home. Just unlucky stuff that can and most likely will, happen to anyone at some point unless you got perfect genes. This prevented me from meeting a deadline and the red star is the result. Honestly, this surprised me as I notified the right people about my unfortunate situation. This has no impact on copiers at all, it simply means my salary got cut by 99%. A gut punch to me for sure, but nothing for copiers to be concerned about. I will fight to get my black star back as soon as possible. I’m still trying to take it a little easy, and by easy I mean prioritizing the portfolio above all else. Regarding the performance. I’ve been reading all the comments and I fully understand how red numbers can be frustrating. There are no excuses for this. Please keep in mind that I invest for long-term and have my entire net worth invested in my portfolio. Indeed, a financial advisor would roll their eyes if they saw this. You’d be hard pressed to find a fund manager with as much skin in the game as I have. Copiers feel pain; I feel pain. It’s only appropriate and it makes the portfolio’s performance all the more important to me. It will always be in my best interest to take the portfolio to new highs and it -will- happen eventually, or rather, it will continue to happen over the years. There will always be bumps along the way. To summarize: First, I’m glad I could push an update out, even if it’s my worst yet! It still feels good to get it out there. As of now I do not have any plans to hedge or to look for safety. I don’t expect this to be a popular choice if the downtrend continues, but that’s my current stance on it. Although you might argue that I already have a bunch of ‘safe’ stocks in Microsoft, Facebook and even Nintendo, ridiculously strong balance sheets with far more cash than debt. Still, I’m not abandoning my high conviction stocks where the growth story is intact. Instead, I have increased exposure and I expect these to come roaring back. Small reminder: I have a Q&A. I think it’s often overlooked so I’m going to link it here: bit.ly/38NF9uo As always, thank you for copying! I wish you and your family all the best in the upcoming holidays.
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