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My High Growth Stock Portfolio in July 2023
Year-to-Date: 35% – Embracing inaction
Every month I’ll provide updates on my stock portfolio to share my investment philosophy, current holdings, and foster mutual learning.
For more frequent updates and my expectations for the next earnings season, follow me on Twitter: @MoritzMDrews
Let's dive in!
As you can read below, I made no changes to my portfolio this month. Instead, I took the opportunity to reflect on my investing approach.
I believe that investing in growth doesn't require constant trading. I prefer a deliberate approach when evaluating new or existing holdings and avoid hasty, frequent transactions.
Being data-driven, I looked at my holding periods:
The Trade Desk: 4.2 years
Crowdstrike: 4.1 years
Datadog: 3.9 years
Cloudflare: 3.0 years
Snowflake: 2.5 years
Wow! Time flies …
During my 5 years in the stock market, I've managed to hold onto some investments for over 4 years, which feels like a reasonably long time to me.
The reason for my extended holding period is simple – I didn't feel the need to constantly trade or make changes while the market was doing its thing. I've learned that sometimes the best move is no move at all.
But shouldn’t I invest in growth companies, riding the momentum and switching around frequently to achieve the best results?
Perhaps - others are having great success with that strategy.
It just doesn’t resonate with me and that’s why I’m still trying to find the investing style that resonates best with me.
My goal is to outperform the S&P 500 because if I can't achieve more than its 10% annual return, I might as well choose an ETF for automatic wealth creation. However, I'm aiming higher, targeting a 20% annual return.
It’s an ambitious goal and to reach it without constant trading, I focus on some factors, including:
Maintain reasonable position sizings below X%.
Invest in quality growth companies with healthy and durable growth.
Ensure my holdings are well-positioned for the future, considering long-term tailwinds, great management, and increasing demand from customers.
It's challenging but possible: I've seen other investors achieve even better results with different approaches.
Back to data-driven facts: How’s it going?
Currently, my portfolio has yielded a 14% annual return (CAGR) since I began investing in 2019, because of the over-hyped 2020 but also despite the brutal 2022.
While that’s below my 20% p.a. target, I attribute this setback to global events beyond my control:
interest rate hikes
the war in Ukraine
the looming recession
However, I remain focused on what I can control:
Staying committed to my goal by investing in quality growth companies, staying well-informed, and making necessary adjustments without trying to squeeze every last bit of performance.
I believe that after the challenging 2022, the market will eventually stabilize, and making the right decisions at least 50% of the time should help me reach my goal.
With that in mind, adaptability and humility is vital, given that the market could be on the verge of the next major megatrend: AI.
Portfolio performance compared to market
Recent changes to the portfolio
Here’s what I did in July: Nothing. 🦥
Note: To keep it concise, only companies with noteworthy updates might be included. Absolute numbers relate to last quarter's earnings release. Metrics are adjusted values (Non-GAAP).
Check out my most recent reviews here:
Earnings season ahead: I'll be back next month with updates on some of our companies. Specifically, I'm keeping a close eye on Cloudflare and Sentinel One. They better deliver!
Thank you for reading and Happy Investing!
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Disclaimer: This portfolio summary is for informational purposes only and does not constitute investment advice. Everything expressed here is solely my personal opinion. As I am not a professional, please do not blindly follow my perspectives as they could lead to incorrect conclusions.