Overall:

Year-to-date:

Great software companies continue to be considered dead by Mr. Market. They're delivering solid guidance, great backlog trends, impactful AI-powered innovation and profitable compounding. Nobody cares today, but they will at some point as long as these things continue. Right now, this is when I think it makes sense to get more aggressive on adding the rest of my cash more quickly.

Their multiples continue to contract while forward prospects remain stable or improving. I think Mr. Market's view towards software has become irrational and I think the deals have gotten compelling. NOW is down to 19x forward FCF with a 20% FCF CAGR. Rubrik is down to 45x forward FCF estimates that I think have considerable upside potential. Even if that doesn't pan out, the FCF growth multiple is slightly under 1x. Axon is still a bit pricy, but now down to a 40x EBITDA multiple (18 turns cheaper than 5-year mean). It's now at a 1.4x growth multiple for what I view as one of the highest-quality firms on the planet. I left a little more room to keep adding to that one than the other two.

Specifically, the adds represent:

If things become more irrational, I'd seriously consider more portfolio consolidation to free up more cash. As I've been talking about in the Discord room, I also have a deposit worth about 2% of holdings that I'm almost ready to make. I'm acting is though that cash is already available.

When babies get thrown out with the bathwater... when indiscriminate software selling takes hold... opportunities to generate multi-year outperformance emerge. I'm going to lean in.

*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:

My holdings that are performing & compellingly priced where I'm happy with what I own:

Uber and DraftKings fit into this grouping. I love both names being around 4% of holdings as prediction market and autonomous vehicle sectors develop and evolve. I am confident in owning both names, but I want to see my bullishness proven out over the coming quarters and don't want either to be a top 5 holding while that happens. I'd say DraftKings has a bit more work to do to keep me confident in their investment case going forward compared to Uber.

I also like what I own with SoFi & Lemonade. I find the valuations compelling but don't see myself adding to or trimming the names in the near future.

My holdings that are performing & expensive where I'd accumulate into meaningful multiple contraction:

Watch List:

"If you were starting a portfolio today, what would it look like?"

"If things got really bad and you ran out of cash, which holdings would you look to cut first to free up more liquidity:"