We Bought Paycom: $PAYC - Malevolent Missy Stock Series #49
Missy is on her way to financial independence. See what she is buying now!
Welcome to the 1st original Smidlap Post on Substack
For those of you who followed my old blog starting in 2017 at FreddySmidlap dot com I closed that website and domain in summer of 2023. I was tired of paying for hosting on an unprofitable enterprise but really liked writing the Malevolent Missy Investing Series. So I moved my old posts over here instead of just tossing them aside. Most of the graphics got lost and that is a shame but the text remains (I think). Missy and I still think QQQ is the best index for your long term investing dollars and we will continue to learn and grow by buying one stock near the middle of each month. Today marks month number 49 in the series I will try and simplify the posts.
Today we bought Paycom Software. Paycom is a fast growing cloud software business specializing in payroll and human resource functions.
Did you ever want to know how to build a successful stock portfolio from scratch?
Since fall of 2019 Malevolent Missy is doing just that and proving the naysayers wrong. Those are the same naysayers who say you cannot beat a diversified low cost index fund like VTSAX with individual stocks so you should not even try. Well, I noticed the term Financial Independence contains the key word "independence" and for me that includes independent thought even apart from the popular personal finance blowhards.
The past year and a half have been rough for some of Missy's stock purchases. First, high revenue-growth stocks were over bought in 2020 and more so in 2021. We all looked smart until the bloom came off the rose and the market overcorrected the prices of good companies and bad to the down side. Not all of Missy's buys will turn out to be life-changing as far as returns but some good ones got knocked down too far in 2022. Eventually the smoke will clear and we'll clean up some of the "mistakes" but for now we just keep buying. Whether you prefer index fund investing or individual stocks you should just keep buying too!
This month we bought Paycom Software PAYC 0.00%↑
First, here is a quote for Enphase stock from Yahoo! finance PAYC stock quote
I encourage any and all stock investors to learn their way around these quote pages on the Yahoo! machine.
Oh, and if you've been following along you will remember real-life Malevolent Missy moved on to greener pastures and a new job that came with a major pay increase in early 2022. So, just like in real life, she increased the amount of her monthly stock buys from $1,100 to $1,500!
Here is the summary for the month. We bought PAYC Stock
Paycom: PAYC: 5.42 shares @ $276.74 = $1500 on 9-18-23
For our scorecard comparisons we also bought our usual equal $1500 amounts of the Nasdaq 100 index (QQQ) and the Vangard Total Stock Market ETF (VTI).
QQQ: 4.04 shares @ 371.28 = $1500
and
VTI (VTSAX, ETF equivalent): 6.77 shares @ $221.53 = $1500
Remember everybody: none of this is a recommendation to buy any particular securities, stocks, or funds. I am not a finance professional. Do your own research and take responsibility for your own money decisions. It's called independent thought and it is a glorious thing. This is merely an example of one way to try and build a winning stock portfolio.
This is Missy’s second time buying Paycom. She and I bought our first shares in summer of 2022. The stock has fallen somewhat out of favor but the underlying business remains robust.
If you did not know or you forgot we own every one of The Missy Series Stocks in our own portfolio
The runners up this month buy.
Today's runner up stock is ASML holdings. ASML essentially has a monopoly on wildly expensive lithography machines used in manufacturing computer chips. I don’t see the thirst for computer chips waning any time soon.
Check out our exclusive CAGR Analysis sheet for free on the link. It has a wealth of information on some of the greatest compounding companies in the world.
Regardless of what we did not do there is always another buying opportunity next month! There is no missing out. Try not to get too eager to get rich quick and just stick to the plan, man.
Malevolent Missy's Long Term Results and Holdings
Although Missy is still lagging the index funds her portfolio is starting to close the gap and hopefully return to its former glory.
Our youthful heroine Malevolent Missy buys one stock per month as she works towards her own financial independence. The key for her is to buy stocks and invest consistently as she builds her winning stock portfolio. She is a real financial lumberjack with the behavior of calm consistency. Here are her results against QQQ and VTSAX
We are building Missy a successful stock portfolio from the ground up in real time
Each month we'll buy an equal $1500 amount of one stock and the same amount of the two index funds, VTSAX and QQQ. The first 12 months our gal was investing $1000/month in one stock and the same in VTSAX in her work retirement account. With her recent raise and promotion she decided to raise those amount to $1500. Any person getting that same raise should consider doing the same as they make more money. Enjoy some of that raise now and invest a little extra too. Don’t be a miser with all of your money, just keep steadily investing and patiently watch the pie grow.
Basically we are buying stocks in real time without any smoke and mirrors or "what if's" like looking backward. Everybody knows it would have been great to buy Amazon stock back in 2002, but what good does that do when we look forward? I'll repeat this part: We also own all of the Missy Series stocks in our Smidlap Portfolio. So our own real money is on the line and it's not just a theoretical stock market game lasting only a short time. This is lifetime investing and hopefully shows what it's like for a young retail investor going through market ups and downs.
Malevolent Missy's background
Winning Money Strategy for Beginners with Malevolent Missy is where you will find a treasure trove of information for beginning investors. I found these posts were getting a little long and repetitive so if you want more background it's on that page. That's also where you can find a list of every Missy buy and some earlier articles for newer investors. Enjoy the new shorter version for the modern person who is on the move. The shorter version is great for the modern short attention span too! Bonus! Even a millennial can get through this post but Gen Z might still struggle as it's not in a moronic short video format!
Real Money Results - This Hits Home Better Than Percentages!
Like I said Missy is now lagging the benchmark QQQ and VTSAX fund average returns with her stock picks. She is only 28 years old though and has time to wait for her future stars to bounce back as far as stock prices. Most of the stocks with beaten down prices are still doing fine as companies and the prices don't always reflect that future growth potential. When growth falls out of favor look out below and hold on tight!
Always look at the total assets- Our gal now has about $150k portfolio in just over 47 months!
$150,000 is a huge chunk of money for a young employee! Anyone should be excited to approach a milestone like that. Missy will have a huge advantage for having started so young with her investing. Can you see how a young person can really start to build wealth just by starting and steadily contributing? It also helps to remember that much of this time Missy has been investing the overall market was high for most of 2020 and 2021. You can see all those buys and accumulation really have an impact when the market starts heading back up like over the past 6 months.
She has plenty in her emergency fund and a nice percentage of her individual stocks in a Roth IRA. Those tax free withdrawals from the Roth will be terrific with her long time horizon to grow those assets.
Also, Missy can afford to be patient with her individual stock holdings when she takes a look at her total asset pie. She still has plenty of index funds (VTSAX) in her 401k and when growth stocks falter those index funds cushion the blow in overall asset accumulation.
Remember, we have a long time horizon for our investments!
What Missy owns
These are all the stocks Missy has sold from her portfolio
Sometimes you just have to admit when you were wrong and take out the trash. I also keep track of how those sold stocks have done since we dumped them just in case we want to have a second look and reconsider those decisions.
I am excited in thinking I figured out how to share Missy's holdings as a Google Spreadsheet. Here's a link in case you want to take a deeper dive. Link to Google Spreadsheet of Missy's Portfolio. This link updates essentially in live time.
Feel free to save yourself a copy of any of these Google Sheets and modify them any way you please.
We keep score against VTSAX because that index is so common for many personal finance blowhards to recommend. You might recognize some of the blowhards swimming in the Reddit cesspool and waxing eloquently about a subject where many have never accomplished anything. They just parrot whatever they heard from an internet guru onto a screen and call themselves an "expert."
You can see that our gal has made 48 buys totaling $59,200. As of September 18, 2023, onl 18 of her 41 current holdings are beating the VTSAX index. We both learned some lessons and keep the faith that we will eventually outperform the index funds over a long period.
Late 2021 and all of 2022 were horrible years for growth stocks and our gal is fortunate to have a long time horizon. 2022 was worse for growth but there are signs things have stabilized for those assets. This is where being consistent and realizing this decline shall pass can pay massive future financial dividends. Our gal just keep on chopping that wood.
How do you feel about Paycom Stock?