No. of Recommendations: 10
Repost of a previous message from 2020. The GTR1 link was updated to use the 2024 industry codes.
retrieved from
https://yorickm.com/Message.php?pid=34450526Author: rdutt
Subject: New screen - Tech Growers
Date: 3/25/2020
I`m presenting here a new SI Pro screen, Tech Growers, which shows the astounding returns that investors in software growth stocks have enjoyed over the past 3 years. Even amid the crushing bear market this year, I`m only down 5% YTD, and this screen is only down 2% YTD. This screen has a 3-year CAGR of 51%, but, of course, it`s quite volatile, and may not be suitable for retirees.
Tech Growers
Market Cap > $1 billion
Sales Growth Year over Year > 30%
Industry = Computer Software | IT Services
Sort desc. by 6-month total return
https://gtr1.net/2013/?~TechGrowersi_20200326_rdut...Statistics are calculated from 20161230 to 20200324 over daily closing portfolio values for all 21 trading cycles of Variant 0.
CAGR: 50.8%
GSD: 40.0
MDD: -36.8%
Sharpe: 1.36
Many of you know that I went all in on Software / SaaS stocks at the beginning of 2018 after following Saul`s board. I`ve therefore held most of the names continuously below for over 2 years. It`s much more tax efficient for me to do this in my taxable account. I sell a stock only when the company disappoints on earnings or if I find a better growth opportunity. Some of my current positions:
AYX
TDOC
MDB
TTD
AMZN (since 2014)
SHOP
OKTA
COUP
ENPH
CRWD
ZM
The SaaS industry is one of those once-in-a-lifetime mega-trends that is still in it early years. AWS, for example, is at a $30B annual run rate, but the Cloud SaaS market is expected to exceed $500B in about 5 years. Peter Lynch said to own companies that you know, and I`m very comfortable owning these, because I work in this industry. We and our customers use many of the products/services above every day, we keep paying the subscription fees every month, and the services are indispensable.
I most certainly do not sell when my stocks are down along with the market. In fact, as I explained in message 276780, I`ve been adding a little to my positions (nibbling as they say) during downturns in this awful coronavirus market. I ignore doom sayers, market timing signals, declarations that the market is "overvalued", etc. I believe you can be successful without knowing where the exact bottom is, as long as you keep adding to core positions over time, and re-evaluate every quarter after earnings announcements.
Good luck to all, stay indoors and stay safe.
-Ron
P.S. It doesn`t make sense to extend the backtest above to years before 2016, because most SaaS companies didn`t even exist then.
