We hope you’re doing well. The new site is now fully launched at io-fund.com. We are also working on a new Forum Guide, FAQs and customer service flow so we can respond to account access issues faster.

We will continue to update you as we find opportunities in this selloff. Many of the stocks we own, including recent additions like CRWD and SNOW, are gifts at these valuations. We are also looking to add renewables exposure to the LTBH portfolio during this sell-off.

This week, you will get an update from David Marlin on security software stocks and why we entered CRWD. I’m working on a Snowflake update that should be out Monday of next week. There’s a chance the update on SNOW gets bumped for an analysis on renewables so we can figure out our allocation here. In the meantime, please reference this past analysis on Snowflake in Forbes here.

LTBH Update

I posted on the forum that we are adding Ethereum and Snowflake as LTBH positions. When the correction is over, we feel these two will more than make up for our losses in BAND and AMWL, which we have now closed. After the weak relative strength in both these positions on the bounce, we felt it was better to log a small loss and put those funds into stocks that we believe will continue to have stronger relative strength coming out of this correction.

Fundamentally, we closed AMWL because the forward is too low. During a few interviews about Unity, I discussed the downside to being early to a trend. For early trends we prefer to keep low allocations. 

We were able to log a nice gain by cutting our position in TDOC in half close to the high.  We think telehealth will be an important trend in the future. However, we could be very early to this trend. The health industry in particular is very slow moving and this could also be contributing to the reason telehealth is facing a tough year.

We closed Bandwidth because BAND should have had a breakout year with the digital transformation and work-from-home trend. Instead, we hold a large position in Zoom as we are bullish on Zoom Phone and the platform that Zoom is building that extends beyond a web conferencing app. I also don’t think Zoom is dependent on the work-from-home trend as I believe those who have Zoom accounts will continue with those accounts, except perhaps the education sector. Many of the education accounts were provided for free or at a reduced cost and this weighed on margins recently.

I am writing a free article update on Zoom Video as it’s part of my free coverage since last year. I think the market and financial news is confused as to where Zoom can go next and I am happy to go on record by revisiting my hardware-as-a-service thesis. It’ll also allow me to follow up on my free Bandwidth analysis and to let people know we closed the position.

Quick Note on the New Site

We will continue to have the old site available for six weeks as we expect to launch our new forum in May. At this time, we will archive Beth.Technology so the team can focus on the forum launch. The next six weeks will ensure we have sufficient time to handle any customer service issues due to the site transfer.

There are a few common mistakes we are seeing for access to the new site:

• People have two or more emails and are running into issues because the system requires the email address you signed up with through Stripe.
• Credit card info was inputted wrong and our system did not return an error message. You can check if your account is active with this link: https://io-fund.com/account. We have fixed this to where an error message is now returned.
• Attempting to use the Beth.Technology password on IO-Fund.com. Due to security reasons, passwords can’t be transferred and you must set a new password for the new website.

To access the new site, you must set a new password. To set a new password, go to https://io-fund.com/welcome.

If you want to learn more about the new site, we created a helpful webinar. To access it on our previous site Beth.Technology, go to https://research.beth.technology/new-website-onboarding/. The webinar is also available on the new website at https://io-fund.com/premium/new-website-onboarding

2020 Returns and YTD Returns

We plan to check in periodically with our returns. Please note, audited returns supersede any information we have provided that was unaudited. We pay an accountant to get our returns audited to build trust with readers and reduce any chance for error as we hold equities and crypto in separate accounts.

Our fund was founded on May 9, 2020, and this marks the inception of our fund to where the equities were combined. This is the date the auditors preferred to track returns for 2020, which makes sense because it represents our true YTD for the fund in 2020.

Below are the terms of the audit and our results from May 9, 2020 through December 31, 2020. We narrowly beat Ark with results of 115.5% compared to Ark Innovation’s returns of 113%.

Please note, although we are sharing our final number with you as a courtesy, we own the audit and we do not give consent for you to share this publicly. Although we will likely discuss our final number from time to time, the terms in which we do this are determined by our agreement with the accountant. 

 

The performance of Ark Innovation from May, 2020 through December 31, 2020 was 113.5%

YTD Returns

We were up nearly 2X the Nasdaq on March 19 and more than 4X the Nasdaq with crypto on March 19. You can see this screenshot below.

We decided to start buying, which hurts returns in the short-term as we are fully aware the correction may not be over. Therefore, everything we buy right now immediately weighs on our results – whereas during an uptrend, what you buy immediately improves your results.

By March 19, ARKK was negative (1.7%) per Ycharts on equities alone compared to our positive 3.7%. With crypto and equities, our returns on March 19 is positive 15% with Bitcoin being up 96% and Chainlink being up 149% YTD.

After buying many equities last week, we have now dipped to negative (5%) on equities for March 26 compared to ARKK’s negative (8.5%). However, with crypto we are at positive 7.78% YTD with 12% allocation to crypto and 88% allocation to equities.

We started the year with a higher allocation to crypto than 12%, so the 7.78% YTD is conservative.

  

We hope our transparency and investment in an auditor demonstrates our integrity and builds trust with you. We realize you have a choice in who you subscribe to and we want you to know that we invest in our convictions and are right alongside you during the ups and downs. Competitively speaking, we think a research site that is audited is putting forth their best effort to earn your trust in what can be a very convoluted and (sadly) sometimes unprincipled space.

As we continue to build out our services with integrity, we believe the strength of our team will become even more apparent. Please keep in mind, we launched in July of 2019 and are about 18 months from the launch. I can only imagine what the team will be capable of over the next five years as we were comfortably positive with crypto during a major and severe selloff in tech.

We are also accomplishing this as a 4-person team compared to Wall Street funds who have hundreds of analysts contributing to portfolio decisions and machines calculating entries and exits.

We do understand that we are often painfully slow in making changes to our site and the forum. We do this to make sure we don’t take our eye off the ball with the market.

With that said, the site is now live and the new customized forum will be launched in May. We think the new site is simple, effective and fast to load. The forum is an important project that we plan to continually improve on and we can’t be more excited to share this with you in May.

Thanks for your readership and for being part of the I/O community.

Sincerely,
Beth