Is This The Eye of the Hurricane? [Q1 2022 Portfolio Update]
The content of this post, or any post in Stumbling About, is for informational purposes only and does not represent investment advice. My investing style is fairly aggressive, and suits my own personality and psychology…it may not suit yours. You should do your own research before using any of the information that I share, and especially before investing.
First, let me say I’m sorry for the long, long delay in getting you the Q1 2022 update. As a wise man once said:
“I shouldn’t have left you without a dope beat to step to” - Timbaland
You’ve been waiting patiently, and for that I applaud you.
The usual context setting
My portfolio is primarily based on a Long Trend Momentum model that I created called Farfin. You can learn more about Farfin here. In addition, I will usually also have a relatively small investment in broad market ETFs, concentrated mostly in the Vanguard Total Stock Market Index ETF (VTI)1.
The combination of these typically results in my investments based on Farfin being 90%+ of my portfolio. However, I will opportunistically pick up other stocks when the market calls for it. As of the end of Q1 2022, my portfolio was roughly an 85%/15% split between Farfin and non-Farfin, respectively.
Everything in this post looks at the combined portfolio (both Farfin and non-Farfin).
High level quarter summary
Results2: The overall portfolio was down -8.2% for the quarter
Market Results: As a reference point, the market (VTI) was down -5.4% for the quarter, so better than the portfolio but close
Buys: At the start of each year, I refresh the Farfin portfolio, which led to three new buys:
Hubspot (HUBS)
ICON PLC (ICLR)
Ensign Group (ENSG)
Sells: As I’ve mentioned over the last couple quarters, I’ve continued to sell a number of stocks that I opportunistically picked up in 2020/21. I also sold a few stocks as commanded by the great Farfin. (all listed below, with respective cumulative gains/losses)
Non-Farfin
Wells Fargo (+51%)
Invesco Commodity Index Fund (+42%)
Fluor (+36%)
Freeport McMoran (+36%)
AB Svnk Agricultural Fund (+33%)
Anglo American PLC (+30%)
HSBC (+20%)
Farfin
Nvidia (+506.2%)
Adobe (+60.0%)
Mesa Labs (+14.6%)
Salesforce (+14.2%)
Illumina (11.8%)
Appfolio (-32.8%)
Coupa Software (-53.4%)
TAL Education Group (-92.4%) ←😒
Top Holdings: DexCom remained my #1 holding at nearly 40%, and here’s the full of top 5:
DexCom (DXCM): 39.1%
Broadcom (AVGO): 19.9%
SeaGen (SGEN): 9.3%
Five9 (FIVN): 4.2%
HEICO Corp (HEI): 3.7%
Top 10 holdings cumulatively: 90.3%
Below is a pie chart of my top 10 holdings for those that enjoy visuals.
Highlighting volatility
I’ve mentioned this in prior posts, and it’s valuable to repeat — my portfolio is highly volatile. This is one reason why my portfolio fits my investor profile and psychology, but wouldn’t work for a lot of people to manage themselves. I can handle the swings and they are a plenty.
Take a look at the cumulative day by day view of my portfolio’s return for the quarter:
For both fun and curiosity I also looked at the cumulative daily return for 2021 and 2020:
2021 was all about the second half of the year for my portfolio:
And 2020 was just an out of this world swing — that is a nearly -50% swing on the way down, and a nearly +75% swing from the bottom to EOY3:
So not for the faint of heart 😄
Lowlights and Highlights
Lowlights
I like to get the ouch out of my system, so let’s start with what hurt (which was plentiful).
Nothing got nearly as decimated as the standard that TAL Education Group set last year (thank goodness), but nonetheless a few of my stock friends did disappoint. Here are the 5 bottom feeders for the quarter:
Trupanion (TRUP): -32.5%
StoneCO (STNE): -30.6%
Hubspot (HUBS): -30.0%
Pool Corp (POOL): -25.2%
Trane Technologies (TT): -24.1%
Pool has been a long time strong performer for me, so it’s sad whenever it dips, but we’re in it for the long haul so now sweat for now. Trane is part of my 50 year bet on HVAC, which isn’t starting off so well I guess! 😩
Highlights
There’s wasn’t a lot to get excited about in my portfolio this quarter, but here’s a look at the less terrible performers…
Here’s the full top 5 quarterly best performer list. For the record, it’s generally not good to have a top 5 best performer that lost money, but c'est la vie:
Cameco Corp (CCJ): +33.4%
Ensign Group (ENSG): +7.3%
Heico Corp (HEI): +6.5%
Transdigm Group (TDG): +2.4%
LendingTree (TREE): -2.4%
Looking to the future
Overall: I mentioned in my Q4 2021 post that this would likely be a volatile year, and that it has been. I remain hopeful for a 2H rally in the portfolio, though if this isn’t the big crash it’s happening soon anyway — only time will tell. Either way is fine because I’m in it for the long haul.
To sell: Cameco Corp is the only stock that is on my might sell list during Q2. Otherwise, just #hodl over here.
To buy: There are 9 stocks that I’ve been keeping in eye on throughout the corner, all hitting the radar for different reasons. Take a look at this post to see what those are, and stay tuned for the Q2 update to see if they ended up making it in.
Q1 ended with a nice little rally. Since I’ve seen much of Q2 now, I know the rally didn’t last, but am hoping that it comes back with a vengeance. Regardless of what the year brings, I’m looking forward to it (nervous anticipation).
Oh, and if interested, you can see my whole end of Q1 portfolio here — these are all my holdings, along with performance for the quarter4. Enjoy!
The content of this post, or any post in Stumbling About, is for informational purposes only and does not represent investment advice. My investing style is fairly aggressive, and suits my own personality and psychology…it may not suit yours. You should do your own research before using any of the information that I share, and especially before investing.
Throughout this and other posts, when I refer to a stock’s performance relative to “the market”, I’m using the Vanguard Total Stock Market Index ETF (VTI) as the proxy for “the market.”
All of my returns are calculated using time-weighted returns.
The strange leveling off at the end of 2020 is because of a sizable amount of cash left uninvested I put in at that time.
Remember, this is not investment advice, I’m just talking about what investments I’m buying / might be buying. I have an aggressive, concentrated style that wouldn’t work for most people. Every investor needs to invest based on their own needs, situation and psychology.