Paul Vs The Market

My January quarterly recaps tend to unfortunately not be as long and in-depth as some of my other quarterly recaps. The reasons are pretty obvious: Not only do the holidays take up a lot of time but I’m also busy focusing on my recklessly bold predictions and setting up the new fantasy investing season. It’s a shame, too, because the January quarterly recap would be an excellent time to reflect on the previous year and do some examination of the Freedom Portfolio’s performance during the year and not just the past quarter. Perhaps something to consider for next time. For now, though, I apologize if this recap is a little shorter than usual. I’ll try to do better next time.

I’ve mentioned a couple of times in the past about how incredible 2020 was for me in terms of my investments and how it would probably end up being the best year of my investment life. It’s entirely possible that 2021 might go down as the worst year of my investment life, not only in terms of absolute returns but particularly in relation to the S&P. Take a look at a tale of two years:

In some ways, in retrospect, it’s not too surprising that such a poor year would follow such an incredible one considering my style of investing where I stubbornly hold onto quality, innovative, disruptive, “growth” companies regardless of how overpriced they might seem to be getting. It’s not normal for any stock, no matter how well the company is executing, to quadruple or more over the course of a single year like so many Freedom Portfolio positions did in 2020. While I never would have tried to predict if or when a pullback would happen (companies like Tesla and Shopify have held up relatively well… so far), it’s also not something surprising or even overly concerning.

That’s not to say I haven’t been feeling the recent terrible performance of my portfolio.. The Freedom Portfolio has been cut nearly in half since the highs of February 2021 and no matter how much confidence I have the things will work out in the long term…. I am only human and it’s stomach churning to lose that much money. My emotions over the past few months have been an interesting mix of pain / anxiety / disappointment over giving up all of those gains from 2020 to excitement whenever I am able to add to some of my high conviction names at prices I couldn’t have dreamed of just a few months ago.

Anyway, the damage to my portfolio has been ongoing over most of 2021, but how did it specifically look in the last quarter? Check it out below:

Ticker	Quarterly Change
TSLA	36%
TTD	30%
SNOW	12%
ETSY	7%
SHOP	2%
SWAV	-11%
DIS	-12%
AXON	-12%
CRWD	-18%
MELI	-19%
CELH	-21%
RDFN	-25%
ROKU	-27%
TDOC	-28%
SE	-30%
ZM	-31%
SQ	-33%
NVCR	-35%
FUBO	-36%
NNOX	-36%
FVRR	-38%
TMDX	-41%
DMTK	-50%

Now let’s dig into some of the outliers from last quarter:

The Best Performers:

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Tesla (TSLA): 36% gain: This may be one of the most painful “best quarterly performers” ever. Why? Because despite being a shining beacon of positive gains in a sea of red, Tesla has been a position that I have been consistently trimming for the past 15 months, from $400 onward. Apparently I hadn’t learned my lesson fully with Shopify about letting my winners run and instead have been cutting back on perhaps the one stock in my portfolio that has best weathered this recent storm. I guess I can look on the bright side and say that at least I didn’t sell all of it? Still, it hurts to think just how much better my portfolio would’ve performed had I just held onto my Tesla shares.

The Trade Desk (TTD): 30% gain: I had to double check my math on this one since, in the time it has taken me to write up this recap, the Trade Desk has given up a lot of these gains from Q4. For whatever reason, the Trade Desk has been pretty volatile to both the upside and downside recently. I suspect it has something to do with people trying to figure out just where the company stands in the new privacy normal ushered in by iOS 14.5 and the restriction on usage of unique identifiers from mobile phones. My money is on the Trade Desk being a winner coming out of this, but time will tell.

Snowflake (SNOW): 12% gain: This one surprised me a bit as Snowflake is notorious for its pretty high valuation and the market seems to be providing the biggest haircuts to the companies with high valuations right now. Perhaps people are starting to believe that some of Snowflake’s growth rates can continue on for longer than previously thought? That’s what I am betting on, as I believe their usage based model can help them continue to surprise people with their growth.

The Worst Performers:

DermTech (DMTK): 50% loss: I’ve mentioned before that during times where my portfolio is struggling, I tend to sell my lower conviction names to buy higher conviction names on sale. DermTech is on track to be one of those companies I sell. I thought there was a chance that their unique skin cancer detection system might have a chance to disrupt things, but it just doesn’t look like it is catching on for whatever reason. I still think there’s potential, but maybe not enough to be investable for much longer.

TransMedics Group (TMDX): 41% loss: Pretty much everything I said for DermTech above goes for TransMedics. Perhaps I am a sucker for the sci-fi looking medical technology. Perhaps I am guilty of ignoring the small market opportunity for transporting organs. Seems like really cool technology, but that doesn’t necessarily make it a great business to invest in.

Fiverr (FVRR): 38% loss: My opinion on Fiverr is pretty much the exact opposite of the above. Yes, it has had a very dramatic drop over the past 6 months. Yes, perhaps I was a little too quick to build up a very large position in a stock that had basically grown 10x in about a year. And yes, I would be lying if I said the comments around “seasonality” in a recent earnings call didn’t have me at least a tiny bit worried, but I am nowhere near ready to bail on my Fiverr investment yet. I still think we’re in the midst of a large change in how people work and I still believe Fiverr can be a big beneficiary of that change and think that this could easily be a company that is 10 times larger 5+ years down the line.

Changes in the Portfolio

Just one round of portfolio changes in the recent quarter. I think we might be seeing a little more than that in the coming months.

• Another exciting fourth quarter

The Freedom Portfolio – January 2022

Here is where the Freedom Portfolio stands now. Need a reminder of what these terms mean? Check out: Defining my Terms.

Ticker	Company Name	Allocation
SHOP	Shopify	Babylon 5
TSLA	Tesla	Babylon 5
MELI	MercadoLibre	Babylon 5
SE	Sea Limited	Enterprise
TTD	The Trade Desk	Enterprise
ETSY	Etsy	Serenity
SQ	Square	Serenity
RDFN	Redfin	Serenity
NVCR	NovoCure	Serenity
TDOC	Teladoc	Serenity
FVRR	Fiverr	Serenity
SNOW	Snowflake	Serenity
ROKU	Roku	Serenity
CRWD	CrowdStrike	Serenity
FUBO	FuboTV	Serenity
SWAV	Shockwave Medical	Serenity
ZM	Zoom Video	Serenity
DIS	Walt Disney	Serenity
AXON	Axon Enterprises	Serenity
NNOX	Nano-X	Millennium Falcon
CELH	Celsius Holdings	Millennium Falcon
TMDX	TransMedics Group	Millennium Falcon
DMTK	DermTech	Millennium Falcon

That’s the recap of the Freedom Portfolio for the fourth quarter of 2021. Let’s hope 2022 is a bit kinder than 2021 was. Thanks, as always, for following along.

Happy 3rd birthday to the Freedom Portfolio!

Yes, it’s been 3 years since I launched the Freedom Portfolio to document my ongoing battle with the S&P 500 for investing supremacy. To celebrate, I thought I might forgo the usual quarterly recap and instead do a little three year retrospective. But before diving into that, I wanted to make one thing very clear:

I am not trying to avoid or hide the fact that the performance of the Freedom Portfolio in the third quarter was subpar or that the performance over 2021 as a while has been pretty bad. I completely own it. In the third quarter, the Freedom Portfolio was down 9% while the S&P was flat. For the year, the Freedom Portfolio is essentially flat while the S&P is up nearly 16%. Two out of the three quarters of 2021 the Freedom Portfolio has lost to the market. I’m losing to the market so far this year and there’s a good chance 2021 will end up being a losing year overall. Not only am I not trying to hide it, but I want to be clear to everybody that this is happening.

Why? Because I want everybody to understand that I don’t stress over the short term and I have my eye on the long term. When you invest in the types of companies that I invest in and hold for long periods of time, it’s almost a certainty that you will experience severe periods of under-performance. After the incredible run-up in many of the companies in my portfolio in 2020, not only was the current under-performance in 2021 not a surprise, but it was almost expected. I’ve been investing for 20 years now. I’ve seen my fair share of market crashes and had my periods of under-performing the market. 2021 is looking like one of those years. 2022 could also be one of those years. It doesn’t shake my conviction. Why? Because of the chart I share every quarterly recap:

Because over the long term, I have confidence that a properly diversified portfolio of disruptive and innovative companies will beat the market. They won’t all be winners. In fact, many will end up being big losers. However, the wonderful thing is that it only takes a handful of big winners, held tenaciously, to more than make up for the losers.

To that end, in place of a quarterly recap of winners and losers, I wanted to take some time to acknowledge some of those big winners that I’ve held since the inception of the Freedom Portfolio. Those companies (and their performance over the past 3 years) are below:

Ticker	October 2018	October 2021	Total Return	CAGR
DIS	116.24	176.01	51%	14.8%
NVCR	52.62	116.11	121%	30.2%
SQ	97.28	239.29	146%	35.0%
JD	25.49	70.02	175%	40.0%
RDFN	18.11	50.97	181%	41.2%
MELI	332.49	1667.6	402%	71.2%
SHOP	163.42	1350.76	727%	102.2%
TSLA	62.14	775.22	1,148%	131.9%
S&P 500	5782.37	8994.44	56%	15.9%

The returns listed above (and below) are based on the end of the third quarter, not the most recent numbers. That often wouldn’t be a huge deal, except for the fact that it has taken me nearly a month and a half to get this quarterly recap done (sorry!) and during that time Tesla decided to go absolutely bonkers and rise roughly 50%. So Tesla’s numbers above are even higher. I felt like that was worth pointing out in case anybody was checking my work.

With that said, let’s dive into my thoughts on these veterans.

The Veterans:

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Disney (DIS): 51% gain, -5% versus the S&P: I officially started tracking the returns of the Freedom Portfolio in October of 2018, but my portfolio still existed before then. Disney is actually my longest held holding. I first bought shares back in 2013. It’s been a wild ride that has seen the value of my shares more than double, yet that hasn’t been enough to keep it from losing to the market. It’s pretty amazing that despite an incredible box office run, massively successful launch of their Disney+ streaming service, and ever increasing prices at amusement parks, the stock has managed to underperform. Is the slow demise of ESPN really that much of a weight on the company? I continue to remain bullish on the company, but there’s no denying that their recent box office success will be difficult to top, streaming is getting more and more competitive, and there might be practical limits to how much even the most magical place on earth can charge. I have no plans for selling Disney, but my conviction in the company being a big outperformer going forward is beginning to slip some.

Teladoc (TDOC): 51% gain, -5% versus the S&P: On one hand, this one isn’t surprising at all. The poor performance of Teladoc as a stock since the Livongo merger has been well documented. On another hand, it’s quite shocking to see the company now trading for around the same value as it was prior to the pandemic AND at a market cap of $22 billion just a year after acquiring Livongo in a deal that valued that company at over $18 billion. I’m still a big believer in Teladoc going forward, but there’s no doubt it has been a big loser for me so far. The next year should be very telling in terms of if it can execute their vision and provide a service that differentiates itself from other telemedicine providers.

Novocure (NVCR): 121% gain, +70% versus S&P: This feels a little disappointing considering the stock is down around 50% over the past 4 months. Novocure has had a good run so far, but I think there’s a lot of upside left and less risk than before. Their trial results for cancers outside of glioblastoma have been very encouraging and there’s good reason to think they should be able to unlock a much larger TAM in the coming years. It’s hard for me to see how this isn’t a company that doubles over the coming 24 months.

Square (SQ): 146% gain, +95% versus S&P: Square is an interesting story in the importance of optionality. For over a year after the inception of the Freedom Portfolio, Square was basically flat. Then, during the midst of a pandemic which slammed many of the small and mid-sized businesses that relied on their point of sale product…. the stock took off, Why? Because of the Cash App and the growth that it saw during that time. Jack Dorsey is an eccentric guy who does a lot of things that I don’t necessarily agree with, but I love his embrace of bitcoin and the chances he has taken by acquiring companies like Tidal. If I had to bet on one horse to lead the United States into a digital banking future, it would be Square.

JD.com (JD): 175% gain, +124% versus S&P: I was a little surprised to see JD.com this high. Part of that is undoubtedly recency bias as I think of how JD has fallen as of late over concerns about China’s crackdown on certain companies as well as rumblings over Evergrande setting off a chain reaction which will bring down the entire Chinese (and perhaps world?) economy. I still like JD, but I would be lying if I said the recent actions of the Chinese government didn’t concern me. Additionally, the rise of Sea Limited (SE) seems to cap the upside in international expansion some and the rise of competitors within China like Pinduoduo likewise has me a little concerned. Lastly, I never like to see a founder step down like Richard Liu recently did. There’s still a ton of upside with JD, but if the time comes when I want to concentrate my portfolio further, JD could be on my list of potential sells.

Redfin (RDFN): 181% gain, +130% versus S&P: What absolutely won’t be on my list of potential sells is Redfin. Yes, the stock is down fairly substantially over the past eight months, but I remain as excited about the future of the company as ever. Glenn Kelman’s decision to treat iBuying as a complimentary piece to provide more options to the customer as opposed to laser focusing on it as the inevitable future of real estate is looking mighty smart after the news of Zillow pausing their iBuying due to too big of a backlog. The real estate market might be cooling off some, but as long as Redfin continues to take market share (and I believe they will) then I will remain a happy shareholder.

Mercado Libre (MELI): 402% gain, +351% versus S&P: Now we’re talking. Mercado Libre has been one of my biggest winners and it remains one of my strongest convictions going forward. There’s a lot of geopolitical risk in Latin America, but there’s a lot of potential upside as well. Mercado Libre is well poised to not only be the leader in ecommerce, logistics, and digital payments in Latin America’s biggest markets, but also to make serious inroads in advertising and credit solutions. This story still feels like it is just getting started.

Shopify (SHOP): 727% gain, +676% versus S&P: Taking into account performance pre-October 2018, Shopify is my biggest winner with an incredible >3,000% return since I bought it in 2017. It has taught me many lessons, and I have written about many of them, but for now I want to focus on one: the importance of diversification. Recently, as I have looked through my portfolio and seen some of my smaller positions perform horribly and my larger positions continue to hold up well, I have thought to myself: “Self? Why do I bother with 25+ positions and instead just focus on my top 5-10 positions? Wouldn’t I have better returns then?”

Shopify is a really strong argument against that thinking. For as bullish as I am on the company right now and as much as I believe in adding to my winners, I only bought shares in Shopify in the Freedom Portfolio once. That one time I bought it, it was a tiny part of my portfolio and maybe around my 15th biggest position. One position that I had more conviction in (and was in my top 10) was Activision Blizzard (ATVI) which has not performed well over the past 5 years (and which I no longer own). Shopify is a great reminder to stay humble. My top conviction stocks aren’t always going to be big winners and sometimes it’s my 15th best idea that will turn out to be my biggest holding.

Tesla (TSLA): 1,148% gain, +1,097% versus S&P: While Shopify is my biggest all-time investing winner, Tesla is officially the biggest winner for the Freedom Portfolio on a percentage gain from first buy to now. Unfortunately, the dollar amount gain isn’t quite as impressive. Why? Because even though I originally bought shares in 2015, I kept trimming my position over the years. I own less than half of my original position (accounting for the stock split) right now. Had I simply held onto my shares instead of trimming, Tesla would easily be my top position and I would be a wealthier person today. Just one more piece of evidence for the importance of letting your winners run as long as the thesis remains intact.

Changes in the Portfolio

The theme this quarter in terms of changes to the portfolio was: concentration. It felt like time to drop some underperformers and companies I had lower conviction in in order to add to winners and higher conviction names.

• Concentrating the portfolio

The Freedom Portfolio – October 2021

Here is where the Freedom Portfolio stands now. Need a reminder of what these terms mean? Check out: Defining my Terms. Since the theme of this update has been looking back on the “veterans” that I’ve held since the inception of the portfolio, I felt it was only fitting to note how those positions have changed since my first Freedom Portfolio update from 3 years ago:

• Disney, JD.com, and Redfin all were Serenity level positions and still are. Considering Disney’s relatively poor performance, I wasn’t surprised it hasn’t moved up much. JD.com was a significantly better performer, having beaten the S&P, although its performance was lower than the Freedom Portfolio overall, which explains why it hasn’t moved much. Redfin is the only surprise to me. Not only did it have pretty strong performance over the three years (although still losing to the Freedom Portfolio), but I also have added to my position a fair bit during that time. I’m still super bullish on Redfin, although it might be time to reconsider if Disney and JD.com belong in the Freedom Portfolio going forward.
• Teladoc and Novocure were Millennium Falcon level positions and are now Serenity level positions. Two companies that have been underperformers (relative to the performance of the Freedom Portfolio as a whole), but two companies that I have added significantly to over the past few years. With continued good trial results coming out, I’m even more confident in Novocure now than I was 3 years ago. My conviction in Teladoc has been shaken a bit by some apparent execution challenges and synergies with Livongo that haven’t seemed to materialize yet. I still think there is a huge amount of potential there, though, and am not considering selling at this time.
• Mercado Libre was a Serenity level position and is now a Babylon 5 level position. Although I did add a few shares since the inception of the Freedom Portfolio, this is almost entirely due to outperformance by Mercado Libre. Even still, this is just an $80 billion company (less than half the size of Sea Limited) and ecommerce and digital payments still seem like they are in the early innings in Latin America. Still feels like a huge runway ahead for Mercado Libre.
• Shopify was an Enterprise level position and is now a Babylon 5 level position (and my largest position). Not sure what else there is to say here. Shopify has been incredible and in a world where Tesla is a $1 trillion company, a $200 billion market cap for such a well-managed leader in the ecommerce space seems pretty reasonable. I’m very happy keeping Shopify as my largest holding right now.
• Tesla was Serenity level and is now Enterprise level. Like Shopify, Tesla has been another amazing story. Unlike Shopify, I have been consistently trimming my Tesla position (much to my detriment) as it has grown to a larger and larger percentage of my portfolio. I’ve done so because I just don’t have the conviction in Tesla to have it be a top 3 position in my portfolio. A large part of the reason for that is a valuation which seems a little insane and that has a lot of upside already baked in. So far, all that trimming has been a mistake, but I don’t necessarily regret it. I sleep better at night knowing that I am not too heavily invested in Elon Musk and his often erratic behavior.
• Square was Serenity level and is now Enterprise level. I don’t talk too much about Square. Maybe that’s a mistake. It’s been a really solid contributor to the portfolio thus far, despite performance that is slightly less than the average for the Freedom Portfolio. It’ll be really interesting to see how crypto and NFTs affects Square going forward, particularly with Jack Dorsey seeming to be primarily focused on bitcoin. Originally, I thought his belief in and focus on bitcoin was a big positive. Now, it seems like it might be slightly blinding him to possibilities in the crypto space outside of bitcoin. Time will tell.

Ticker	Company Name	Allocation
SHOP	Shopify	Babylon 5
SE	Sea Limited	Babylon 5
MELI	MercadoLibre	Babylon 5
TSLA	Tesla	Enterprise
SQ	Square	Enterprise
RDFN	Redfin	Serenity
TDOC	Teladoc	Serenity
ETSY	Etsy	Serenity
FVRR	Fiverr	Serenity
TTD	The Trade Desk	Serenity
NVCR	NovoCure	Serenity
ROKU	Roku	Serenity
CRWD	CrowdStrike	Serenity
ZM	Zoom Video	Serenity
SNOW	Snowflake	Serenity
JD	JD.com	Serenity
SWAV	Shockwave Medical	Serenity
DIS	Walt Disney	Serenity
FUBO	FuboTV	Millennium Falcon
AXON	Axon Enterprises	Millennium Falcon
NNOX	Nano-X	Millennium Falcon
TMDX	TransMedics Group	Millennium Falcon
CELH	Celsius Holdings	Millennium Falcon
DMTK	DermTech	Millennium Falcon
SKLZ	Skillz	Millennium Falcon

That’s the recap of the Freedom Portfolio for the third quarter of 2021. Thanks for following along. Hope you all have an enjoyable holiday season and I’ll try to get my next update out in a more timely fashion.

I struggled a bit with what to write about for my quarterly recap this time around. In many ways, it has felt like the world has been in a bit of a holding pattern over the past few months as it waits to see how things shake out. Will a new COVID variant kick off a second wave which leads to new lockdowns? Will the Federal Reserve continue to keep rates low or will less-than-transient inflation cause them to take action? Will we continue to be seeing supply shortages and what areas might be next? Will surges in remote work and ecommerce during COVID stick around? How quickly will people be going back to cruises and movie theaters and airplanes? How long can Wall Street Bets and retail investors keep the meme stocks going? Are cryptocurrencies the wave of the future or a bubble in the process of bursting? Can the red-hot real estate market continue or are we looking at another housing crash? How will the streaming wars shake out? How does online advertising deal with the privacy changes being enacted by Apple and Google?

In many ways, this was reflected in my behavior during the quarter. I only wrote three posts and fewer changes to my portfolio than is typical. I think a lot of that is because, much like the rest of the world, I’m also waiting to see how things shake out and where certain long term trends go. For many of the questions I posed above, I have companies whose fates are closely entwined with the answers. If COVID lockdowns come back in some form we might see even more growth in ecommerce (SHOP, MELI, SE), and digital payments (SQ), and streaming (ROKU, DIS), and remote work (ZM). Bitcoin recovering from its recent stumble would undoubtedly be bullish for Square. A real estate bubble bursting would spell trouble for Redfin (RDFN). There are a lot of moving parts in the future of advertising which will ultimately determine how companies like The Trade Desk (TTD), Magnite (MGNI), and Roku (ROKU) will end up.

So that seems to be the theme of this past quarter: being in a holding pattern. It seems pretty fitting given my long term focus. There shouldn’t be any rush to make snap judgements on trends that are going to take years to play out.

Speaking of long term trends, here’s the updated Freedom Portfolio performance including the most recent quarter:

As you can see, it’s been a nice rebound from the drop last quarter as the Freedom Portfolio basically doubled the performance of the S&P 500 in Q2 16% vs 8%. The S&P 500 is still well ahead for 2021 as a whole, though, so this might be one of those years where I lose to the market. After the performance I had in 2020, I can’t be too upset with that.

Here are the returns of each of my positions over the past quarter:

Ticker	Quarterly Change
NVCR	66%
CELH	51%
SWAV	44%
FUBO	43%
ROKU	38%
CRWD	34%
SHOP	26%
AXON	24%
ZM	19%
TTD	17%
SE	16%
SKLZ	16%
FVRR	8%
SQ	6%
MELI	3%
TSLA	3%
SNOW	2%
ETSY	-1%
JD	-5%
DIS	-7%
RDFN	-8%
TDOC	-9%
BFLY	-11%
TMDX	-17%
DMTK	-19%
MGNI	-21%
NNOX	-22%

Notable Performers

Best Performers

NovoCure (NVCR): 66% gain: Novocure might have had the most exciting quarter of any other stock in the Freedom Portfolio. Part of it is because it was up a whopping 66% for the quarter, but part of it is also due to the fact that it popped 50% in one day in April due to overwhelmingly good results for its phase 3 trial for using Tumor Treating Fields on non-small cell lung cancer. This is a company which has more than tripled over the past year and sports a market cap over $20 billion, but I think there’s still room for growth. The treatments for which Novocure has FDA approval still tend to be rarer forms of cancer and there are many trials ongoing to study the efficacy of Tumor Treating Fields on more common forms of cancer. Additionally, no other company seems to be developing any similar treatments, so this is a field that Novocure could completely own. I’m happy to continue holding on to my full position despite the big gains.

Celsius (CELH): 51% gain: Celsius is one of those companies well outside my comfort zone. What kind of disruptive innovation can a beverage company provide? What kind of durable moat can it have? Anybody familiar with the story of Monster Beverage (MNST) can certainly provide an answer. For those who don’t know, Monster Beverage (the energy drink company) is one of the best performing stocks of this century, having outperformed such massive successes as Apple (AAPL) and Netflix (NFLX). I’ve done some research (discussions with the younger generation and some first hand beverage consumption) and I think there’s a decent chance that this “healthy” (put in quotes because I’m a bit skeptical of the claim) energy drink could be a decent sized winner going forward.

Shopify (SHOP): 26% gain: Not the biggest percent gain among the Freedom Portfolio, but notable for being such a large jump for my largest holding. Despite having had an exciting journey during that time, Shopify is essentially flat over the past 5 months as people undoubtedly are trying to figure out how much of the ecommerce surge that happened during COVID is here to stay. More than a play on ecommerce, though, I see Shopify as a play on entrepreneurship. For a variety of reasons, I believe people are getting less and less content working a typical 9-5 office job and are looking for something that will give them more freedom. For those who are also interested in being their own boss, I think Shopify has a compelling offering, and I believe that will continue to be a powerful tailwind for the company going forward.

Worst Performers

Nano-X (NNOX), DermTech (DMTK), and TransMedics Group (TMDX): 22%, 19%, and 17% losses: It seemed only fitting to combine these three companies since they represent three out of the four biggest losers during the past quarter and they are in similar situations to each other. All have potentially revolutionary new ways of addressing a medical issue. All of them are early in their life cycle and are either waiting on things like FDA approval or general acceptance from the medical establishment. I expected volatility from all of them so it doesn’t surprise me at all to see them all bringing up the rear in terms of performance this past quarter. If things work out for any of these companies, I fully expect them to be big winners in the coming 5+ years. However, I also think there’s a very good chance things don’t work out, which is why they currently remain small positions for me.

Changes in the Portfolio

Not a ton of changes in the portfolio over the past quarter, but those few changes were pretty seismic as I sold two of the positions that I have held the longest:

• Saying goodbye to some old friends

The Freedom Portfolio – July 2021

Here is where the Freedom Portfolio stands now. Need a reminder of what these terms mean? Check out: Defining my Terms. A few notes:

• Mercado Libre dropped from being a Babylon 5 level position to an Enterprise level position, largely due to the stock not having rebounded as much as the rest of the portfolio. It’s difficult to tell why. Are investors worried about Sea Limited’s Shopee making inroads in Latin America? Are there concerns over COVID? Political instability? Is it because the stock has more than tripled over the past 16 months? I have no idea, but I remain incredibly bullish on the company.
• Teladoc and Square dropped from Enterprise level positions to Serenity level ones. Interestingly enough, those were the exact same two companies which had moved from Serenity level positions to Enterprise level positions during the previous quarter. Apparently the big takeaway is that both companies are right on the edge of Serenity and Enterprise level positions. Maybe they’ll swap again next quarter.
• Disney moved from a Serenity level position to a Millennium Falcon level position thanks to some mediocre performance over the quarter (down 7%). With things continuing to open back up and Disney+ continuing to be on a roll in terms of releasing compelling content, I’m not at all worried about Disney going forward. In fact, if the opportunity presented itself, I might consider adding.

Ticker	Company Name	Allocation
SHOP	Shopify	Babylon 5
SE	Sea Limited	Enterprise
MELI	MercadoLibre	Enterprise
TSLA	Tesla	Enterprise
NVCR	NovoCure	Enterprise
TDOC	Teladoc	Serenity
SQ	Square	Serenity
RDFN	Redfin	Serenity
FVRR	Fiverr	Serenity
TTD	The Trade Desk	Serenity
ROKU	Roku	Serenity
ETSY	Etsy	Serenity
JD	JD.com	Serenity
ZM	Zoom Video	Serenity
CRWD	CrowdStrike	Serenity
SWAV	Shockwave Medical	Millennium Falcon
FUBO	FuboTV	Millennium Falcon
DIS	Walt Disney	Millennium Falcon
SNOW	Snowflake	Millennium Falcon
NNOX	Nano-X	Millennium Falcon
AXON	Axon Enterprises	Millennium Falcon
SKLZ	Skillz	Millennium Falcon
TMDX	TransMedics Group	Millennium Falcon
DMTK	DermTech	Millennium Falcon
CELH	Celsius Holdings	Millennium Falcon
MGNI	Magnite	Millennium Falcon
BFLY	Butterfly Network	Millennium Falcon

That’s the recap of the Freedom Portfolio for the second quarter of 2021. Thanks for following along!