It’s been a bloodbath in my portfolio for many months now, and I finally got around to shaking things up a little bit. These transactions happened a few weeks ago. Sorry for the delay getting this written. Who knew that 5 day a week swim and dive practice for two kids would be such a time sink? Also, some COVID in the family didn’t help. It does help to put things in perspective, though. Alpha is nice, but health is better. Anyway, here are some of the moves I made in my portfolio lately, along with my rationale.

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Sells

Sold entirety of Disney (DIS): Another long time holding bites the dust after nine years. Disney has been such a frustrating holding. Despite nearly doubling my money, Disney fell well short of the roughly 140% gain of the S&P during the same time period. Every time it felt like the company started gaining momentum with massive box office receipts and blowing away Disney+ subscriber numbers, it was followed up with a momentum breaker like a cash reserve draining acquisition or a global pandemic that shut down many of their main revenue generators.

So why sell now, with things opening back up and the acquisition in the rear view mirror? Simply put: the thesis is busted. When I first invested in 2013, I thought Disney had huge potential to create a strong streaming solution to rival Netflix and dominate the box office with the newly acquired Lucasfilm (Force Awakens was still over a year away) and red hot Marvel Cinematic Universe (the first Avengers film had just been released and Thanos was still a very distant threat). Now? Disney is the clear number two video streamer and 10 of the top 15 grossing movies of all time are Disney related. Additionally, the video streaming market went from basically just Netflix to oversaturation.

Speaking of oversaturation, I’m worried that might be happening with Disney+ and the avalanche of MCU and Star Wars shows. Initially, there was a huge novelty seeing something like The Mandalorian and I used to wake up early every Wednesday to watch new episodes of WandaVision and The Falcon and the Winter Soldier to avoid getting spoiled throughout the day. Now? Not only has the novelty worn off, but it almost feels like there’s too much to keep up with. I’m sure I’m not the only one who feels that way.

Lastly, it’s worth noting that the CEO change is a point of concern as well. Bob Iger was a greatly respected, long time CEO who made a number of big and bold moves to transform Disney during his tenure. The jury is still out on Bob Chapek, but I think it’s fair to say that the results have been mixed so far. He seems to have rubbed many people the wrong way and I believe his decision to wade into Florida politics was an absolutely terrible one. It’s hard not to see the CEO change as a net negative, at least thus far.

So, with many of the catalysts I was banking on for Disney as an investment having played out, now seems to be the time to look for better opportunities for my money.

Sold entirety of Nanox (NNOX): This one is pretty simple. Nanox was always a high risk / high reward pick and it looks like the risk didn’t pay off. Management just keeps on failing to execute. Founder Ran Poliakine is out as CEO. FDA clearance keeps getting delayed. I’ve lost patience and see better opportunities to deploy my capital elsewhere.

Buys

Added more Redfin (RDFN): The past 30 months or so have been some of the most chaotic that I’ve ever seen in my lifetime for the real estate market, and that includes the housing bubble bursting during the great recession. At least in that case it was a relatively straightforward up and then down. The past two and a half years have seen an almost instantaneous collapse of the real estate market during the COVID lockdowns of the first quarter of 2020. That was immediately followed by an incredible comeback as low supply, low mortgage rates, remote work, and the great migration led to a red hot real estate market. Now we’re seeing the brakes get slammed on again with some of the fastest rising mortgage rates ever. Throughout it all, Redfin has handled it about as well as can be reasonably expected. They’ve continued to grow market share (although it has been decelerating, which is a concern) and continued to build out there complete offering by acquiring Bay Equity and RentPath. Their cautious approach to iBuying allowed them to avoid completely blowing up their balance sheet (looking at you, Zillow) and their reduced commission business model should be particularly appealing during a slowing market where buyers are more cautious.

I like Redfin the company now as much as I ever have while the shares have almost never been cheaper.

Added more Roku (ROKU): I can understand why Roku has been hammered along with other “COVID” stocks. Growth in video streaming services seems to have stalled out, which seems like a big warning sign for Roku. I think the market is overreacting, though. Chord cutting and the migration to video streaming services doesn’t seem like a temporary thing that is going to get rolled back. Roku is a dominant player in the space, and is also well positioned to benefit from the increasing shift of ad dollars to connected TV. I’m happy to lower my cost basis on Roku here.

Added more Sea Limited (SE): Sea has had a few minor setbacks over the past few quarters. They seemed to have scaled back their ambitions in terms of expanding outside of the Southeast Asia area. Freefire seems to be losing popularity some. And India seems to be getting more hostile to them making inroads. However, the main reasons I was initially bullish on the company still remain in place. There is a massive opportunity in Southeast Asia for ecommerce and digital payments and I think Sea is well positioned to take advantage of that opportunity. Still a happy shareholder, and excited to add to my position at these levels.

Added more Shopify (SHOP): The extreme turn in sentiment for Shopify is a bit hard for me to explain. Did the stock get overly expensive? Definitely. Did people get overly optimistic about the company and misjudge how much of the shift to ecommerce would stick around post-COVID? Apparently. But an 80% drop is still pretty extreme. I continue to believe Shopify is well positioned to be the #2 option in ecommerce behind Amazon and that it will continue to benefit from trends that started before COVID, even if COVID accelerated them.

Those are my recent portfolio moves. What do you all think? What do you disagree with? Is Disney too high quality to sell? Should I have given Nanox more time? Or cut my losses earlier? Am I being too stubborn with Redfin or Roku or Sea? Let me know in the comments!