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Table of Contents
a. Performance Updates
Overall:
Year-to-date:
b. Portfolio Change
I'm cutting DraftKings. Their core business continues to look weak. They delivered another week of negative Y/Y volume growth in New York (-6% Y/Y) and there are no event timing issues to use as an excuse. I've been talking about how important this piece of data would be to me, and it was bad like it has been for a month.
I see the parts of the market where I focus aggressively selling off and I want to focus on the names not giving me reason for structural fundamental concern. I do not think this company is doomed or in permanent decline, but I think the growth engine is seriously challenged right now and I have more confidence in risk/reward elsewhere.
It is still very cheap at 18x forward FCF. The issue is that cash flow estimates for 2026 have been cut in half over the past year and I don't have enough conviction in that trend reversing. I plan on tracking this name at least until this quarter. If volume data remains poor, that will likely push me to stop watching it.
I also decided to trim about 15% of my Alphabet stake today. The multiple has nearly doubled in a year and cash flow estimates are about to tank with the new CapEx guidance. I want to harvest some profits in one of the names that has worked best amid this bloodbath to create more flexibility for the other high-conviction names that haven't gotten way more expensive since mid-2025 (they've done the opposite).
Brutal stretch for the portfolio. I am remaining active, agile, open-minded and staying the course.
In terms of adds:
12% SoFi add. I've been talking about being happy with what I own. At the same time, I've also been talking about potentially changing my mind if the sell-off got aggressive enough. It has... so I have. I think the company now trades a little under 25x forward EPS with upside to their 40% 3-year EPS CAGR guidance.
12% Zscaler add. This one is simple. I don't think their product suite is at all vulnerable to agents. I think their platform and massive base of data will defend against these disruptors. It's now down to 31x forward FCF with a mid-20% multi-year FCF CAGR expectation.
10% Uber add. I still do not want this to be one of the largest holdings. But I've been talking about being happy with what I own with the position near 4% of holdings. It fell closer to 3% of holdings, so I wanted to bring it back up to that level.
10% Rubrik add. They told us they beat all guidance metrics for Q4 last night. That drives more multiple contraction and more conviction in the longevity of their growth engine, so I continue to add.
c. Portfolio Management Strategy
*the order of the names in these lists below is meaningless.
My holdings that are performing & compellingly priced where I'd accumulate into modest multiple contraction:
Amazon
Meta
Mercado Libre
Zscaler
On
ServiceNow
Nu
Coupang
Axon
Rubrik
SoFi
My holdings that are performing & compellingly priced where I'm happy with what I own:
Uber fits into this grouping. I love the name being around 4% of holdings as autonomous vehicle sectors develop and evolve. I am confident in owning it, but I want to see my bullishness proven out over the coming quarters and don't want it to be a top 5 holding while that happens.
I also like what I own with Lemonade. I find the valuation compelling but don't see myself adding to or trimming the name in the near future.
My holdings that are performing & expensive where I'd accumulate into meaningful multiple contraction:
Shopify (getting closer to being moved to the list above)
Cava
Alphabet
Starbucks
Watch List:
CrowdStrike (would love to re-enter at some point)
Sea Limited
Netflix
The Trade Desk
DraftKings
"If you were starting a portfolio today, what would it look like?"
8% Amazon
8% Meta
8% Mercado Libre
7% Alphabet
6% Zscaler
6% ServiceNow
5% Nu
5% Coupang
5% Starbucks
5% Lemonade
5% SoFi
5% Rubrik
4% On
4% Uber
4% Cava
4% Axon
2% Shopify
9% cash
"If things got really bad and you ran out of cash, which holdings would you look to cut first to free up more liquidity:"
Shopify if it continues to hold up a lot better than other software holdings. It remains very expensive and the other software tickers I own (which I also view as elite businesses) are not.
d. Updated Holdings
