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Unicorn Portfolio Monthly Update

Feb. 29, 2024
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Wiko Steyn
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Wiko Steyn

#20 of 20 Stock Revealed.

 

We first have to point out that inflation finally came in below estimates! If you have been reading our articles you would know that this is a big deal and the reason why your portfolio is likely up by a significant margin during the last two trading days. Before anyone gets too excited, it is not quite the time to pop the champers and it certainly does not mean that it is the end of the bear market. Remember, flipping a coin has the same chance of predicting the bottom as anybody on the internet, but inflation coming down is definitely a step in the right direction.


Similarly to our Core Fund last week, we are picking the final stock in our Unicorn Portfolio and again we had a few options to choose from. Below is a list of all the companies we considered:

  • Block (SQ)
  • Meta Platforms (META)
  • Crocs (CROX)
  • GoPro (GPRO)
  • Desktop Metal (DM)
  • Lemonade (LMND)
  • Schrödinger (SDGR)

We have a mix of forgotten heroes that might make great turnaround stories (Meta Platforms, Crocs, GoPro), some industry disruptors (Desktop Metal and Lemonade), a fintech company with some crypto exposure (Block), then lastly a drug discovery company using the latest in AI technology (Schrödinger).

We narrowed it down to our top 3 ideas and used our Scorecard to pick stock number 20 for our Unicorn Portfolio. You can view the scorecards of Lemonade, Schrödinger and Block in the images attached.

Block came away with the highest score and therefore claimed position number 20. Block was also a contender for our last position in the Core Fund and we alluded to the fact that it might be more suitable to the Unicorn Portfolio. To find out more about the difference between the scoring methods for the Unicorn Portfolio and Core fund, read our article: Our scorecards explained.

Block formerly known as Square is a fintech powerhouse with an entire commerce ecosystem. Square was founded in 2009 by Jack Dorsey and Jim McKelvey and launched its first product in 2010. In November 2021, Jack Dorsey resigned from his position as CEO of Twitter and a few days later, Square rebranded to Block and announced their intention to focus more specifically on Bitcoin-related projects.

We are not going to do a cryptocurrency analysis in this article but we feel it is important to understand the risk involved especially considering the recent FTX debacle. Yes, Block has some cryptocurrency exposure but it is certainly a real business which provides real value to its customers. With Jack Dorsey at the helm, you can be sure of continued bitcoin integration while Block tries to build the ecosystem of ecosystems and you need to be comfortable with this concept if you are a current or potential shareholder of this company.

Block has two main offerings in Cash App and Square, these are connected together by their recent acquisition of Afterpay, a Buy Now Pay Later provider.

The Cash App is a mobile application that enables consumers to execute easy peer-to-peer payments with the iconic cashtag which is derived from the hashtag commonly used in the social media world. However, the application has expanded to include Bitcoin trading, stock trading, and more. As Block states the app is the easy way to send, spend, bank and invest.

Square is Block's iconic merchant solutions which consist of point-of-sale devices and software. Square's developer platform is also a key selling point of the system. This enables merchants to create customised solutions and scale their business across multiple locations faster than with incumbent solutions.

Block also has some exciting ventures in their pipeline like TBD which is a decentralised exchange. Jack Dorsey is certainly a polarizing figure and one thing we can guarantee investors is that this is going to be a rollercoaster ride. If this does not sound like a good portfolio fit for you, you might be better off having a look at our Safe Haven or ETF portfolio (90% of people should steer away from investing in individual stocks).
 

 

Portfolio Updates Summary

Considering the current macro environment we are happy with the performance of our Unicorn Portfolio after 6 months.  We have outperformed the general US market (S&P500 and (Nasdaq) and quite a significant outperformance to comparable benchmark funds like the ARK Innovation ETF. 

  • Buy $250 FVRR at $30.23
  • Buy $250 SQ at $58.44



Disclosure

This is not financial advice and is only based on the author's opinion. This is not buy or sell recommendations of any stock.  The $10K is not real money and only a demonstration of a typical portfolio. The Unicorn Portfolio is a high-risk portfolio and should always remain a small allocation of your overall assets. This is an actively managed portfolio where we will buy and sell positions as we deem fit without any regard for taxation. Remember, all selling of stocks triggers a tax event in most countries and it is the investors personal responsibility to always remain tax compliant.


 


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