Overall:

Year-to-date:

Sentiment towards software remains awful, with every new product launch from AI darlings sending the companies lower and lower. You can make much better arguments for these product launches supporting overall software demand, but nobody wants to hear those right now. They will. Not yet.

The themes that I have laid out for winners vs. losers in this sector remain the same. Companies with access to large bases of proprietary data that can effectively use that signal across a wide array of interoperable products will be fine. The innovation ball is far more in the courts of these companies than many believe at this point in time.

I just also think markets are not at a point where they're ready to pick between those winners and losers. There's a ton of anxiety right now, and people are choosing to indiscriminately sell and ask questions later. This is when times are most frustrating and this is when times are most appealing to slowly add from a forward risk/reward point of view. I'm not having fun. I'm not enjoying this. But I know exactly what I need to do to maximize my chances for strong future performance. Ignore the whiny, emotional human in me. Listen to the formulaic and robotic investor.

That is what I will continue to do dispassionately. If these names keep falling, I will keep adding. I have another small deposit worth around 1% of holdings almost ready to go. I am also willing to use Cava as a source of cash to create more flexibility in these names as well. I would prefer not to, but it is possible this happens. Finally, as I told Max readers, I may be selling a minority stake in this company (nothing about the product will be changing). That could create a larger chunk of cash for the brokerage account. Not sure yet.

I am tempted to get even more aggressive right now. I know many of you see the remaining cash position and the planned deposit and think "what the heck are you waiting for? Buy!" I hear you. Part of me agrees with you. Part of me wants to deploy everything right now and wants to concentrate even more heavily on the larger holdings in the portfolio. It has been an internal battle to refrain from doing so and to force myself to go about this in a slower, more gradual manner.

I know markets can get more irrational before things start to make more sense. I know lower lows are not certain, but always possible. While deals are more compelling in these names than they've been in a long time, they can get more compelling. I want to give myself the opportunity to take advantage if that happens. I am fine accepting the risk of missing a bottom and an opportunity to deploy some of my available funds.

*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 & expensive where I'd accumulate into meaningful multiple contraction:

Watch List:

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