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Project $1M: May And MercadoLibre Bring New Highs

Jun. 01, 2020 1:13 PM ETMELI, TEAM, VEEV, CRM37 Comments


  • The Project $1M portfolio continued strong performance in May and once again has reached all-time highs.
  • MercadoLibre, Atlassian, ServiceNow, and Veeva were all strong performers.
  • The delta to the S&P 500 has widened as the flight to quality increased.
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Project $1M continued its strong performance in May delivering a return of 9.3% compared to 4.76% from the S&P 500. The portfolio now is once again at all-time highs which were last reached during the middle of February. Performance for the month of May was most notably powered by MercadoLibre (MELI) which was up a stunning 46%. ServiceNow (NOW), Atlassian (TEAM), and Veeva (VEEV) were also other strong contributors each delivering double-digit return contributions for the portfolio for the month. May has seen a continuation of the strong performance in April, which has now powered the year to date performance of the Project $1M portfolio to 12.62% compared to the S&P 500 (SPY) (VOO) which has delivered approximately -5% year to date.

Portfolio history

My broad investment focus with the Project $1M portfolio is the purchase and long-term hold of a limited number of high growth, cash-generating businesses that are powered by secular tailwinds. The overall objective of the portfolio is to turn a capital base of $275,000 that was initially deployed in November 2015 into $1 million by November 2025 and outperform the S&P 500 in the process. The process to achieve this objective is just simply to buy a great business at good prices and let compounding and time take care of the rest. The initial $275,000 in the capital has been fully deployed and will not be added to for the rest of the project duration.

May Performance

Project $1M ended May with a balance of almost $608,000, up $60,000 for the month. This was the highest ending monthly balance for the portfolio since its inception. For the first time in the 4.5 years since the inception of the Project, the difference in annualized performance vs. the S&P 500 has blown out and is now almost 10%, which is largely a

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This article was written by

Integrator profile picture

I am an investor who is focused on disruptive businesses that are transforming industries lead by visionary leaders with substantial skin in the game. I have spent nearly 20 years in a formal capacity in various investment banking and corporate advisory roles, having attained my MBA with a concentration in finance. This led me toward a path in Venture Capital and working with entrepreneurs building new technology businesses, and I have had the opportunity to not only invest in a number of amazing privately held businesses, but also play a meaningful role in growing several of these early stage enterprises as well. I am now focused on applying my lens of private market disruption and leveraging secular tail winds to the public markets. This was a journey which I started with my public Project $1M portfolio series and which I have deepened with my marketplace service, Sustainable Growth

Analyst’s Disclosure: I am/we are long GOOG, FB, MELI, MA, V, SPY, NOW, TEAM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (37)

Love your portfolio and investing style Integrator . A stock that recently got into my radar that I’m surprised you don’t own based on some of your holdings (Tencent, BABA, MELI, AMZN) is Sea Ltd (SE).
They’re a global player in esports / gaming while being the leader in digital entertainment (Garena), e-commerce (Shopee), and digital payments (Seamoney) in Southeast Asia. 33% owned by Tencent and their vision is to become the epicenter of internet transactions in SE Asia .  

Revenue growth has consistently been pretty explosive.... reminds me a lot of MELI of SE Asia + gaming. Thoughts on this company?
Integrator profile picture
Hi, I really do like that business, SE and actually own some. The Project $1M portfolio is structured as fixed capital project, through to end of term, so I have to sell to add new names, which I've generally refrained from doing. I structure my marketplace service as one where I have been deploying fresh capital, so that tends to have a few more names that I own which aren't necessarily in this portfolio, but SE is a good business.
Hidden Rock Capital profile picture
Great performance. Some of these stocks may be overvalued (e.g. Morningstar gives one or two stars for Mercado and Adobe) so do you
intend to keep holding?
Integrator profile picture
Yes, I will be. I only sell if the investment thesis is broken, and don't believe thats the case with either of these businesses. Their intrinisic value will continue to increase.
Atlas Capital Investing profile picture
Just started reading recently, I find your articles as really useful and interesting. Planning to go through them from 2015, related to project 1m. One observation though. When looking at performance of PRNHX it shows that performance is very similar to yours. I attribute this to low interest rate environment. Here comes question: is it worth doing all this research as one can just follow this index? If interest rates go up, your growth portfolio will suffer most probably, as it did in 2016. Thus users must be vigilant do not overexpose themselves to growth stocks (my opinion). Thanks anyway, good reading.
Integrator profile picture
Hi, I just took a look at PRNHX. I'd watch the expense ratio on that one, its almost 0.9%. That could have been what helped Project $1M deliver a better performance.
KamilAgrawala profile picture
Great stuff. Can you do a comparison against VGT ? I added aggressively to VGT during the march lows. VGTs top 5 holdings are AAPL, MSFT, V, INTC, MA. VGT has outperformed QQQ recently (last 3-5 years)
Integrator profile picture
Hi, looks like Apple and MSFT alone are more than 40% of this portfolio!. I think Project $1M has a slight advantage so far this year, but VGT has done a little better in last couple of years.
FWIW, I am was very much influenced by Marc Andreesen's "Software eats the world". Perhaps you find the following link interesting:


Here on SA, I highly recommend App Economy Insights cf., for example the following article which might serve as an introduction:


Over the years, I have basically accumulated all "digital" tickers which made any sense to create my own "future fund". The winds have been very favorable (except for a few Chinese tickers) and I think they will continue to be favorable. As long as the Central Banks don't close the faucets ...
Just to clarify, this by no means meant as criticism. I am wondering myself about the performance of my own portfolio (it is not easy to measure because I have been buying regularly over the last years, done some selling as well, collected some dividends (very few) and put a lot of fresh money in every year).

I was very certain that my stocks in payment, software and emerging markets would have widely outperformed the S&P 500. But now I am wondering to which extent the Central Banks have just lifted all boats.
Dear Integrator, first of all thank you very much for the great work over the last years!!! Apart from general thoughts which reinforced my beliefs in the area where we have overlaps, I owe you Pro Medicus and the courage to invest again into TEAM, inter alia ...

What I do not understand is why the above portfolio has not outperformed the S&P 500 by a much wider margin. In the above portfolio you have almost no losers and some exceptional winners. Are the numbers correct? Otherwise, do you have an explanation?
Integrator profile picture
Thanks for your comments, my responses below.

1. As much as the broad thematics in software play a role, I am less trend driven and more focussed on enterprises creating really solid businesses. It just so happens that the portfolio is peppered with a bunch of technology names, but I also tend to find these types of names in healthcare, financial services and have also held consumer discretionary names in the past. I also want really good businesses, solid moats, attractive economics, rather than just leveraging a trend for the sake of leveraging a trend.

2. I tend to eschew too many Chinese companies, beyond the stocks already held. I find there's too much risk there and its not aligned with my strategy of long term capital preservation

3. Why no greater outperformance? Ha!. If you consider my holdings, the portfolio skews very much large cap. Its hard to outperform by >10% annualized over such a long period with these types of holdings. The exceptional high performers, MELI, TEAM suffered from smaller position sizes, a deliberate strategy on my part to derisk earlier stage businesses when the portfolio was first created. I am very happy with the performance thus far, it probably represents at least $150k delta over the 4.5 yrs versus had I put the money in the S&P500.

4.As far as central bank influence vs underlying position performance. Reasonable observation, though I'd say good businesses still shine because they are good businesses. Central bank influence has failed to help prop up and stabilize commercial REITS, discretionary retail, industrial and a bunch of poorly performing sectors. Central banks may amplify the effect on good businesses, but they can't make something thats junk shine. At some level revenue growth and earnings growth is required, and central banks can't manufacture that, no matter how poor the business.
Thank you for your detailed answer. I agree with most of what you are writing. I thought that the large cap focus might be an explanation for the not so large outperformance (only in view that you almost only selected huge winners for this portfolio (I have many more losers in my own portfolio).

I do not think that software is a recent trend only - and explicitly for that reason I cited the 2011 Andreessen article.

Having worked for conglomerates in Europe I have closely watched quite a few different industries. I see the revenue and earnings growth potential mostly in the field of technology/ software (and in payment, Asia generally, biotech and, I thought ..., travel airports). All the classical markets (food & drinks, FMCG generally, retail, cars, raw materials, chemical industry, industrial conglomerates etc, etc.) seem to be saturated. And the growth in software is asset light and the SW companies carry no liabilities from the past (debt, pension obligations, huge workforce etc.) like many traditional favourites.

I understand the concern with China, in particular the political and legal risk, each of them both in China and the US. But I firmly believe that the economic future is in Asia and I want some exposure to it (in my case ca. 30%).

Thank you very much again for your great work.
serpo profile picture
I envy your results. I am still down 2.5% for the year.
serpo profile picture
No NVDA or APH in your portfolio?
Integrator profile picture
I do like NVDA, its just too expensive for me at these levels.
Integrator, who is mlvsa? I tried to reply in kind with Slp a favorite of mine but it looks like mlvsa is not an individual? thank you
mlvSA profile picture
Thanks @brainleft for the recommendation of $SLP ,i will take a look.
not many of us will ever forget this year and it's only June. I'm now up single digits for the year thanks in part to authors such as yourself here on sa and also because I was buying with abandon at the end of March.
Integrator is the reason I've made bundles in names like tdoc, docu,ayx,avlr,roku, etc.
my favorites from this portfolio are V, adbe and team. I'm patiently waiting to add to them in my portfolio.
thank you!
mlvSA profile picture
@brainleft - take look at $fsly,$enph,$se,$lvgo - I'm no momemtun chaser either,but these have some solid fundamentals and tam in their respective areas.
I hold ENPH since the beginning of the year. I am interested in FSLY and SE but I couldn’t find the company with the symbol Ivgo. Can you confirm the symbol?
mlvSA profile picture
Livongo health
How would you make allocation decisions today?

It's clear that you consider all of these positions to represent longterm values for the portfolio at current levels, but how do you rank current valuations? You mentioned adding Adobe in March—would that mean you consider Adobe to be the most undervalued part of the portfolio?

Put another way, I am wondering how you evaluate the portfolio. Although I understand that your intention is to not actively trade these positions, I'm am curious as to what your process of allocation would be with these positions.

Thank you for the update and article.
Integrator profile picture
Fair question. The thing that needs to be remembered with many of these names is that their intrinsic value will continue to increase with time, so whats best value isn't necessarily static, and any overvaluation, unless its really excessive, isn't terribly cause for concern in my opinion. Looked at today, the Chinese equities BABA, Tencent, Baidu are the best value in my view. Of the others. I also think CRM is pretty reasonable as well. MA, V have run hard from low's but would always make up any core portfolio I built, even at these levels.
Are you not worried about Chinese stocks getting delisted?
Integrator profile picture
Not in respect of the positions I hold, BABA, TCEHY and Baidu. In the worst case, the shares will just be converted to ordinary shares on their home exchanges (HK for all of these at the relevant time). You are probably also talking at least 3 years from time of the reg passing (in whatever its final form is). At this stage, I don't want to box at shadows. The delisting also just means the shares don't trade, not that the entitlements don't exist. I don't have any intention of trading these.
Wow!! Very impressive returns. I have been following VEEV and MELI. Always look expensive. Missed the opportunity when it dropped in March.
Integrator profile picture
March provided a very brief opportunity, which unfortunately looks like its been very firmly shut on these now, at least for the time being
Librarian Capital profile picture
Well done, impressive figures.
Integrator profile picture
Thanks Librarian Capital, I appreciate it. Really good businesses rather than anything else. Makes it easy to hold.
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