I’ve been a little quiet here recently despite a ton of earnings reports coming out. Over the past few weeks, there’s been some pretty spectacular earnings reports from major holdings in the Freedom Portfolio:

• Shopify (SHOP)
• Mercado Libre (MELI)
• Square (SQ)
• Sea Limited (SE)

And a bunch more. So why the radio silence? Because I’ve been a bit distracted by a recent investment of a different type.

Earlier this month, we were blessed to welcome our third daughter to our family. All things considered, she’s been a pretty mellow baby, but anybody who has every dealt with a newborn before can tell you that they are incredible drains on free time and sleep. So even though I have continued to keep my eye on the companies in the Freedom Portfolio, I have struggled to find the time to write about them as much. I didn’t want to have this earnings season pass without anything written, though, so here’s a few thoughts on recent developments:

Great companies dropping in the immediate aftermath of amazing earnings. One theme I have noticed this earnings season is how often stocks have dropped despite really strong earnings being reported. It happened previously with Shopify and Mercado Libre and it happened yesterday with Sea Limited. I’m not at all concerned and would go even further and say it even makes sense. Shopify and Mercado Libre has more than doubled this year. Sea Limited has more than quadrupled. That’s really strong performance which drove up the valuation (and expectations) for those companies. It seems perfectly reasonable for those stocks to “take a breather” to let the financials catch up to the valuation. I still strongly believe in all of those companies going forward and, if anything, my conviction is strengthened by seeing them put up these great numbers. I wouldn’t be surprised to see some of these companies be flat for a few more months or quarters, but I remain really excited to see where these companies are 5+ years down the line.

Tesla to the S&P 500. News broke a few days ago that Tesla (TSLA) was getting added to the S&P 500 index in December. In the two days since, the stock has popped, leading to a few near spiffy pops for me. I get the reason for the short term stock movement, and it will be interesting to see how the stock reacts to so many index funds being required to add so many shares of Tesla in the coming months, but I honestly don’t know if this impacts the company itself very much. I love the company whether it is in the S&P 500 or not.

Buying more Etsy. The Teladoc / Livongo merger went through recently. As part of it, my Livongo shares got converted to some Teladoc shares but I also got paid out some cash for them as well. I used those proceeds to add a bit to my Etsy (ETSY) position after it dropped a bit on the positive COVID-19 vaccine news. I didn’t add much. It remains a Millennium Falcon level position. Coincidentally, I saw my first Etsy commercial just a few days after adding to my position. I know Etsy has had a great 2020 so far, but I really think they can keep their momentum going with the upcoming holiday season and can expand their business beyond just birthdays and anniversaries. Really interested in seeing how the company performs over the coming quarters.