Snowball Portfolio Update | December 2020

Updated: 6 hours ago


The Snowball Portfolio was incepted on 8th Jan 2020. At the end of Dec 2020, The Snowball Portfolio is up 23.18%. Meanwhile, our benchmark, the Vanguard Total World Stock Index is up 16.42%, representing an outperformance of 6.76%. The aggregate value of The Snowball Portfolio is S$494,267.50 (Long: S$506,986; Short: -S$12,718). For the breakdown of the individual holdings and respective weights, you can find them at the Portfolio page here.


December Transactions


Closed Positions:

  1. Short Peloton Put. Exited the position at a 90% gain on the option contract value when the stock popped after the company announced that it was acquiring Precor for $420 million.

  2. Long China Maple Leaf Education. Exited the position completely at a 20% loss. Recycled the capital into increasing long position in Lvji Technology.


Opened Positions:

  1. Short Dropbox April 16 2021 23 Puts. Dropbox under a US$10bn valuation seems attractive to me and I am happy to accumulate under $23 per share. Dropbox is a highly scalable business and is owner operated. The company is currently debt-free and generating copious amounts of free cash flows (~5% FCF yield). Recurring revenues with increasing ARPU. I think the market is overlooking the stickiness of Dropbox's business and is over discounting the risk of competition. I am saying this not as an investor but as a long-time Dropbox user and subscriber.

  2. Short Tiger Brokers April 16 2021 5 Puts. Tiger Brokers turned in a solid 3Q20 results on 25 Nov 2020. Total revenues increased 148.2% y-o-y while operating income increased to US$7.4m from negative US$2.5m in the same quarter of last year. The company appears to have passed its inflexion point and found product-market fit amongst its target audience (i.e. millennials in Asia). At US$7.94 per share, the franchise trades at slightly over US$1bn. Compared to Robinhood's private valuation of US$11.2bn, Tiger Brokers appears to have considerable upside if it can continue to execute well and gain market share in Asia.

  3. Short Airbnb April 16 2021 100 Puts. While the company currently trades at a US$88bn valuation, I am only willing to accumulate it under a US$60bn valuation (or ~US$100 per share) as of now. Airbnb has a decade-long revenue growth runway and is led by an excellent management team. The company is still in the early innings of disrupting the hotel industry. I do hope that the price reaches more rational levels for me to initiate a sizeable position.


Thanks for reading,

Kenny


Disclaimer: This article is not an investment (buy/hold/sell or otherwise) recommendation, this is only for educational and discussion purposes. This article is not tailored to the specific circumstances of any reader. I/we/The Snowball do/does not purport to be in the business of providing financial advice and the contents of the article should not be regarded as such.

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