It's time for another super exciting portfolio update! That's it. That's the update. Or it
would be if I wasn't still holding about $65,000 in cash. Whenever people hear that they tend
to remind me that investing today is better than investing tomorrow and that the market
is designed to go up. Well, that's actually true! But I'm not here to invest in the market.
I'm not putting a hundred grand into the S&P 500, or the NASDAQ, or the Dow. Instead, I'm
investing in individual hyper-volatile growth stocks and cryptocurrencies, the same things
I cover on this channel. These things can shoot up or down 10% or more in a single day.
And, uh, many of them have. I'm looking at you, Peloton. What's more, many of my favorite
companies have had to find clever ways to deal with a global pandemic. Remember that?
Oh yeah, and inflation is the highest it's ever been in my. entire. life. In this episode,
I'm going to show you my updated portfolio and give you another investing exercise that
costs you absolutely nothing and I feel will make you a much better investor. Your time
is valuable, so timestamps are enabled for your convenience and we can get right into
it. If you're just here to see what's in the portfolio, here it is upfront. A lot has changed,
so let me break it down for you. There are currently 23 stocks and 1 cryptocurrency - Ethereum.
This is probably as spread out as the portfolio will get. This is a thematic portfolio and
the themes I think will provide the most returns over the next decade are Fintech, the advanced
tech stack, virtual worlds, and a half-baked theme I'm calling disintermediation. If you've
been following the channel for a while, you'll know that those themes actually have a lot
of overlap, and ARK Invest covers them all with their research. If these themes sound
like a bunch of buzzwords to you, no problem. Let's go through each one real quick.
Fintech is financial technology. So it's about making it easier to do things like banking,
investing, getting a loan, payments processing, and so on. The internet and artificial intelligence
are making financial products and services much more streamlined and affordable. That
means emerging markets where a lot of people are still just gaining access to the internet,
like South East Asia and Latin America, will go through a Fintech revolution as more businesses
stop needing to rely on their government's broken and fragmented physical banking systems.
So, some of my Fintech positions are Mercado Libre, M E L I, Upstart, U P S T, and Stone,
S T N E. All 3 of these positions have dropped 10 to 30% in the last month alone and you
can see that I'm in the red on all of them. Stone actually dropped thirty percent while
I was recording this due to their most recent earnings report. Thirty. Three zero. I'll
make a separate episode covering their most recent earnings because they were actually
pretty good, but for now, imagine how salty I would be if I spent all the money I had
planned for Stone in one go.
The next theme in the portfolio is what I'm calling the advanced tech stack. The tech
stack of a business is the collection of software platforms, tools, and technologies it runs
on. If that makes you think of Amazon Web Services, you're on the right track. In my
opinion, a business's tech stack is going to change in 3 ways. First, all businesses
will become more data-driven and more automated. In my portfolio, that's Palantir, ticker symbol
P L T R, and UiPath, P A T H. Second, in a world full of cyber-attacks and data breaches,
businesses will invest more in cybersecurity. That's Cloudflare, ticker symbol N E T, and
Crowdstrike, C R W D. Third, more of the business world is shifting to online work, online sales,
and online networking, so I think communications services will keep getting more and more important.
That's Twilio, T W L O, and Zoom, ticker symbol Z M.
The third theme is the metaverse. To me, these are the companies focused on digitizing, simulating,
and designing things in the physical world or creating new digital worlds altogether.
These companies build some combination of viewing devices for augmented and virtual
reality, as well as physics engines, graphics cards, and supercomputers. One nice thing
about this theme is that it overlaps with the other themes. Fintech is important to
the metaverse for the same reason it's important to the internet; people will transact in virtual
worlds like they do in the physical one. And just like any other internet-based service,
companies doing business in virtual worlds will want a smart, automated, and secure tech
stack. Another thing that's really nice about this theme is that the leaders of tomorrow's
Metaverse are already leaders of today's internet. Google, Facebook, Nvidia. Unity Software is
a core piece of software to most companies building on it, so it could've gone in the
tech stack theme instead. Same with the products and services made by Nvidia. The fourth theme
is all about disintermediation. It's a loose catch-all theme that just tried to capture
this idea of using advanced technology to streamline a legacy professional service down
to just the essentials. If you find a company that successfully does that, it's probably
a great company. Peloton connects you directly to the trainers; no gym required. Tesla takes
the dealers and, eventually, the drivers out of point-to-point transport. Teladoc takes
the office out of the doctor visit.
The reason Sea Limited, ticker symbol S E, and Ethereum are my two biggest positions
is they fit all of these themes, not just one or two of them. Since they represent 20%
of my investments right now, let me add a little more context to them. This is public
dot com's page on Sea Limited. This is always where I start my research now because it usually
has a quick tidbit on what's going on. Sea Limited has 3 main business units: Garena,
which focuses on online gaming and publishes some of the most-played games in the world,
Shopee, which is one of the biggest e-commerce shopping platforms in Southeast Asia and is
expanding internationally, and SeaMoney, which is Sea Limited's digital payments and financial
services branch. If each one of these business units were their own stock, all 3 would be
in my portfolio. I'm not joking. Just like Tesla's different business units focused on
auto, energy, robotics, and AI training. And just like Tesla, the fact that they are all
one company and get to cross-talk and leverage each other's assets is what makes the company
even more special. Sea shares are trading lower after reporting mixed Q3 results. There's
a lot more chatter about Sea Limited after earnings, so there's new information being
digested by the market on it right now. Sure enough, these headlines give me a sense that
there's something I need to look up and try and understand right now and these articles
are probably a great place to start, so that's what I'm going to do after I finish crying,
I mean recording this episode. The way they organize and present stock data is one reason
I'm a big fan of public dot com and asked them to be a sponsor for the channel. Whether
you're looking for a new home for your own portfolio or you just want to invest in the
channel that invests in you, you can go to public dot com slash ticker symbol you and
you'll receive a free slice of stock worth up to $70 when you fund your account. I'll
leave a link to that exclusive offer for you in the description below.
My other top position is Ethereum. Based on my limited understanding, Ethereum is the
Sea Limited of cryptocurrencies. Some of the biggest blockchain-based games like Axie Infinity
and Alien Worlds and Cryptokitties are on the Ethereum network. Don't judge me. Marketplaces
for NFTs and digital collectibles run on Ethereum. For example, VeVe is an app-based marketplace
for premium licensed digital collectibles. With VeVe, people can obtain digital collectibles
of different rarities and showcase them in the virtual showrooms, as well as buy, sell
or trade them with other users. VeVe has a licensing deal with Disney, DC Comics, and
others, so their collectibles include everything from Marvel and Star Wars to Batman and Superman
to Star-trek, and a lot more. That's real commerce happening on the blockchain. And
of course, Ethereum on its own fulfills the role of being Fintech, but in a different
and much larger way than SeaMoney. So, in my opinion, Ethereum and Sea Limited embody
my vision of the future in two completely different, unrelated asset classes - stocks
and crypto - so I'm happy holding both right at the top. Comment below or tweet me at Ticker
Symbol YOU with your thoughts on my portfolio right now, remembering that the goal is to
compete with ARKK, ARK Invest's thematic innovation fund that's actively managed by Cathie Wood.
Do you not like one of my themes? What do you think about the weightings of the stocks?
Am I spread too thin? Do I hold too much cash? Seriously, I'm excited to hear your thoughts.
If you don't like one of my stocks or themes or ideas about the future, just don't invest
in it. If this whole metaverse thing isn't an idea that excites you, don't worry about
it. You should be thinking of the entire stock market as a buffet. And all of YouTube for
that matter. It's ok to buy some of the stocks your favorite investors talk about and not
others. It's ok to buy a stock, learn something new about it and then sell it if new information
changed your mind. It's okay to be wrong. We YouTubers don't really say that enough.
It's not okay to stay wrong. That's what's going on with the bottom positions in my portfolio,
mainly Peloton and Snapchat. I haven't sold a single share of these stocks but I haven't
bought the dip because I'm really thinking about their valuations versus the rest of
these companies on my list.
In my previous portfolio episode, I gave you and myself an exercise. Our job was to take
our favorite 30 or so stocks and rank them. The top half of your list or so form the core
of your portfolio and the rest should be your watchlist. If a stock gets added to your watch
list, another one has to be taken off because we'll never be able to keep track of hundreds
of stocks. A stock has to make it to the top of your watch list before it can be placed
in the bottom of your portfolio. That's how your watch list protects your portfolio from
your emotional decisions. If you want to learn more about that exercise and try it for yourself,
check out my previous portfolio episode. I'll leave it in the top right-hand corner of your
screen right now and in the description below as well.
Here's the issue. If you already hold a bunch of stocks and did this exercise, you probably
ran into an interesting problem. Your new ordered list and your existing portfolio don't
match. That means you're wishing you held more of your top stocks and holding some stocks
you're no longer very confident in. [this is fine] I totally get it! The first thing
you need to do is not beat yourself up because these are living breathing evolving companies
that are changing all the time. It would actually be a lot weirder if your list and your portfolio
always matched exactly as new information came out and the stock price kept moving.
We YouTubers don't really say that enough either.
That said, here's the next exercise. All we're going to do is start at the top of the list
and ask ourselves: based on everything I know about this stock, do I want to be holding
more of it, the same amount, or less of it today? Don't go and do anything crazy, just
answer that question honestly for each stock. If you're not sure, that just means you should
go read the latest earnings report and a few articles on the stock or go find a few good
YouTube videos on it, or however you do your own research. If you wish you were holding
more of every single stock, you probably need to raise your standards. This isn't tinder.
You don't need to swipe right on everything you see. What you'll probably find is there's
a stock somewhere in the middle of your list that's pretty close to spot on. You like the
stock, you're glad you hold the shares you have and you don't want to buy more at these
prices, but you would if it dipped hard. Hopefully, most of the stocks above it are stocks you
wish you were holding more of and most of the stocks below it are stocks you would cut
before you would cut that one. If that's not true, ask yourself again if your list is really
in the right order. If you have several stocks you're happy with like that, find the bottom
one, by weight. This stock is the new bottom of your portfolio. You're done swiping right
on stocks that you have less conviction in than that one until something fundamentally
changes.
For me, that stock is Facebook, ticker symbol F B, which will change its ticker symbol to
M V R S in December. Look at my stocks underneath Facebook. Nvidia, AMD, Tesla. These are some
of the best companies in the world. They also got 40% more expensive in the last 4 weeks
or so. I want a lot more of them, but not at these prices, so they're staying below
Facebook until their prices come down or they grow into their valuations a little more.
That doesn't mean I'm selling them; I'm just letting them be because I don't think these
companies are 40% bigger than they were a month ago. The rest of the stocks below Facebook
- Signify Health, Pinterest, Snapchat, and Peloton - are also good companies. They're
just companies I'm not worrying too much about because look at the very top of my portfolio.
Almost all of my highest conviction stocks are on sale. I bought them at prices I thought
were fair and they're all 10% off. So, if the order of my list is right, where should
I put my next dollar? For you, the place to start is with the highest company on your
list that's dipped the hardest. For me, it's definitely one of these top 7 companies.
In just 2 straightforward, free exercises, we've narrowed our investing universe to 30
stocks and ordered them in a way that quickly lets us spot opportunities and prioritize
our research. We didn't dump all our money into the market at once and by being patient,
we avoided a massive sea of red among some of the most volatile stocks on the market.
Getting organized costs us nothing. Staying up to date costs us nothing. But I can't help
but wonder how much it gained us in the long run. This is Ticker Symbol YOU. My name is
Alex. Reminding you that the best investment you can make... is in you.