[DARWIN] KAJ by Shivank

[Shivank]

Hello Traders,

Throughout my trading journey, I've faced the common experience of burning through several accounts, amounting to around $1500. I believe many of you can relate to this struggle. As I delved deeper into the trading world, I encountered the term "investing the Hardway." This realization came from reading books like "Security Analysis: The Classic 1940 Edition" and "Trading in the Zone."

Currently, I've adopted a systematic investment plan (SIP) since December 2022. This plan is a combination of investment strategies and rules based on the principles of value investing. While I'm in the early stages of this endeavour with limited capital, I decided to create this thread to share my amateur learning experiences and to benefit from the insights and discussions within the t2w community.

To implement my strategies, I've opted for two brokers:

(1) Darwinex: This allows me to leverage the prize money from DarwinIA (hopefully).
(2) Interactive Brokers: This choice gives me access to a wider range of asset classes and shares.
I'm also providing a link to my portfolio and I'm eager to see snapshots of your portfolios and hear your comments. Currently, I'm holding three stocks (EOG, CTSH, and BIIB) due to my limited capital and the focus on risk management.

Looking forward to engaging with you all and growing together in our trading journeys.

DARWIN KAJ - Provided by ShivFinance and managed by Darwinex

Meet DARWIN index KAJ and add it your portfolio of liquid alpha from €/£/$ 200. Broker and asset manager regulated by the FCA (UK) and the CNMV (Spain).

www.darwinex.com

 

[Shivank]

Trading in 2023 was relatively good (after couple of failed attempts at Darwin). Managed to win one Darwinia (old edition) and got the "Good score" filter for first time and stayed just for brief period of time. Hopefully, will achieve it again. Looking forward to comments and critical assessment for fellow traders.

In general, I stick to the trading plan and strategy with risk management. However, I made couple of mistake (highlighted with red) where I shorted Nvidia and Apple with high leverage (out of pure intuition/greed and speculation) and lost money in both the counts. For 2024, my plan is to improve risk management to next level and be consistent with small gains (keep the greed out of play).

Happy Holidays and Best wishes for 2024!

 

[Shivank]

KAJ has finally qualified for Darwinia Gold. The goal is to maintain disciplined trading. The major issue is investing in stocks through the Darwinex broker, as the holding period for these stocks spans several months, and swaps consume a significant portion of the profits. As a result, stocks aren't a suitable instrument to invest in on Darwinex. Therefore, I'll stop opening new positions and exit existing ones at favorable prices. Instead, I'll focus on investing in indices, particularly the S&P 500, with occasional strategic positions in forex.

I've seen significant improvement in trading discipline since my last update, maintaining a low-risk profile while achieving decent returns.

Hopefully, this progress will catch the attention of real investors, though I'm uncertain if the current track record is strong enough.

 

[Shivank]

This was very eventful month, I missed the Darwinia by 2 ranks (at some point I was +2% and could have secured Darwinia prize if would have closed positions). Evenafter not winning Darwinia, I am happy that I made the right decision overcoming the greed and by not changing investing thesis.

BIG POSITIVE is one of the investor has trusted the Darwin KAJ by investing 10k+. I would like to thank him/her and it gives me more motivation to have disciplined and responsible behavior towards investing.

Furthermore, to have more skin in the game added more funds to the account.

 

[Shivank]

Over the last six months, I have held positions in Alphabet, Applied Materials, Meta, and Cincinnati Financial Corp. During this period, as stock prices increased, they became more overvalued, so I gradually trimmed my positions. By mid-July, I had completely exited from these stocks. Following this, the equity market corrected slightly, making some stocks, such as Applied Materials, somewhat attractive again, though still not in the buying zone.

I still have investments in three undervalued stocks within the Specialty Industrial Machinery and Financial sectors (large caps). Due to profit-taking, the balance in my Darwinex account decreased during July, a situation mirrored in my IB account. My current portfolio consists of 80% value stocks and 20% growth stocks.

Darwinex:

As an investor, I still don't like using Darwinex as my broker, and for this reason, I keep my balance to a bare minimum. I can't tolerate the swap charges on stocks, which consume 7 to 10% of my investment (not profit). For example, if I have $1,000 invested in Darwinex, I pay approximately $70 in swap charges over a year. Especially if an investor is not using any leverage, why should there be swap charges? The only thing preventing me from leaving Darwinex is the prize money and rewards from Darwinia.

However, why do investors still invest in a Darwin strategy when they have to pay a 20% performance fee on profits, 1.2% management fees, and 5 to 10% swap charges on assets? Isn’t it crazy? I would love to hear your views on this.

Best regards,
Shivank

 

[IlIlIlIlI]

Over the last six months, I have held positions in Alphabet, Applied Materials, Meta, and Cincinnati Financial Corp. During this period, as stock prices increased, they became more overvalued, so I gradually trimmed my positions. By mid-July, I had completely exited from these stocks. Following this, the equity market corrected slightly, making some stocks, such as Applied Materials, somewhat attractive again, though still not in the buying zone.

I still have investments in three undervalued stocks within the Specialty Industrial Machinery and Financial sectors (large caps). Due to profit-taking, the balance in my Darwinex account decreased during July, a situation mirrored in my IB account. My current portfolio consists of 80% value stocks and 20% growth stocks.

Darwinex:

As an investor, I still don't like using Darwinex as my broker, and for this reason, I keep my balance to a bare minimum. I can't tolerate the swap charges on stocks, which consume 7 to 10% of my investment (not profit). For example, if I have $1,000 invested in Darwinex, I pay approximately $70 in swap charges over a year. Especially if an investor is not using any leverage, why should there be swap charges? The only thing preventing me from leaving Darwinex is the prize money and rewards from Darwinia.

However, why do investors still invest in a Darwin strategy when they have to pay a 20% performance fee on profits, 1.2% management fees, and 5 to 10% swap charges on assets? Isn’t it crazy? I would love to hear your views on this.

Best regards,
Shivank

I have no excperience with stock CFDs at Darwinex.
At Darwinex you don't buy the stock, you buy CFDs which means you don't pay the full price, you "pay" the margin of the stock deducted which is a money reservation.

Swaps are related to a credit amount behind the full price of the stock.

You can also earn swaps, you do not always pay them:

Currently usually you only earn swaps if you hold a short position overnight.

I'd aprreciate if investors might share their thoughts on your post.

 

[Shivank]

Hello Everyone,

I’ve noticed that this forum has become less active and I miss the vibrant and fruitful discussions we used to have, especially during official Darwin community.

Darwin KAJ is going strong with five investors who have collectively invested over $50,000. I’m deeply grateful for your trust and fully aware of the responsibilities that come with managing KAJ.

Recent Updates​

1. Portfolio Stability:
Over the past two months, there haven’t been any major changes to the equity holdings in KAJ. Currently, we are invested in four stocks, and I plan to maintain these positions through the expected market volatility surrounding the upcoming U.S. elections. I’ve decided to pause any new investments for now, opting to wait for better entry prices in our current holdings. Additionally, I’m keeping a close watch on stocks like GOOGL and ADBE, waiting for the right pricing to make a move.

2. Investment Philosophy:
All investment decisions for KAJ are grounded in fundamental analysis, inspired by various books on value investing. I firmly believe there’s no secret formula for picking stocks—it’s about thorough research and disciplined decision-making. In the spirit of transparency, I plan to share my analyses and disclose the equities that KAJ holds in upcoming posts. This way, you can have a clearer view of Darwin operations and make informed decisions about your investments.

3. Addressing Swap Fees:
In my previous post, I expressed concerns about the high swap fees on Darwinex, which can disadvantage investors in terms of performance and management costs. To mitigate this, I’ve opened an account with IBKR(that is connected with Darwinex) and started making investments there. This allows me to eliminate swap fees by investing in the cash segment rather than CFDs (plus IBKR is more trustworthy and I feel more comfortable there). However, I recognize that there’s still a disadvantage in terms of high management and performance fees for investors, especially those not using leverage with Darwinex. I’m open to any suggestions or alternative options to minimize these fees for both traders and investors.

Let's Stay Connected​

I hope some of my investors are reading these updates, and I encourage you to engage more in this forum. Your feedback and ideas are always welcome!

Wishing you all a Happy Diwali and Happy Halloween!

 

[CabedoClenow]

Eventhough, the underlying account is in IBKR, so far investors will replicate it using CFDs, so there is no way to skip swap costs for them. Darwinex has not implemented fractional shares yet, so currently it is not interesting to invest in strategies which universe investment would be nor stocks nor ETFs excepting if the invest intraday or short term swings…

 

[Shivank]

Yes, Investor will pay Swap fees and it is painful to see. As said previously, I believe Darwinex is not the best broker in terms of fees and charges; so for investors also it is bleeding lot of money. However, with IBKR i have more trust to deposit more money (Skin in the game) and same time can manage the money of investors and Darwinia. So atleast for traders (me), the issue of swap cost is resolved.

I hope there will be more improvement to Darwinex (not in the current direction they are focused with Darwinex zero).

 

[Shivank]

As promised, I am sharing my detailed analysis of Veeva Systems Inc., a key equity I have invested in, along with the underlying investors at Darwinex. Despite a recent drop of -7% in Veeva's share price, my investment approach remains steadfast until investment thesis helds with a long-term perspective of 1 to 3 years. I have been building my position in Veeva for an extended period and have added significant amounts to my portfolio through systematic investment planning (SIP).

Disclaimer

I am invested in Veeva Systems Inc. and may further invest in the future, along with clients I advise. The information provided in this analysis is for educational purposes only and should not be taken as financial or investment advice. Please consult your financial advisor before making any investment decisions.


Overview

Veeva Systems Inc. (NYSE: VEEV) has cemented its position as a leader in cloud-based solutions tailored to the unique demands of the life sciences industry. Its comprehensive suite of software applications supports pharmaceutical, biotechnology, and medical device companies by enhancing compliance, boosting operational efficiency, and driving informed decision-making.

The life sciences industry operates under strict regulatory scrutiny and faces increasing pressure to accelerate drug development while maintaining compliance. The move towards digital transformation has intensified in recent years, creating a fertile environment for Veeva’s integrated solutions. By addressing these critical industry needs, Veeva has positioned itself as a strategic partner rather than just a software provider.

Market Outlook: As regulatory requirements grow in complexity, the demand for reliable, integrated software solutions will continue to rise. Veeva’s suite of products is well-suited to capture this demand and drive further growth.

1. Business Overview
Veeva's offerings are divided into two key platforms:
Veeva Commercial Cloud: This platform optimizes sales and marketing processes, allowing for better customer engagement and operational excellence.
Veeva Development Cloud: This platform provides an integrated ecosystem for clinical, regulatory, quality, and safety processes, ensuring data integrity and compliance throughout the product lifecycle.
Key Products:
Veeva CRM: A robust customer relationship management tool tailored for sales teams in the pharmaceutical and biotech sectors, enabling improved customer interaction and strategy execution.
Veeva Vault: A first-of-its-kind unified content management system designed for seamless integration across commercial, clinical, regulatory, and quality domains.
Veeva Compass: A powerful suite that provides de-identified patient data and actionable analytics to help organizations make data-driven decisions.

2. Financial Performance Analysis
a. Revenue and Profitability Trends
Veeva's revenue growth over the past decade has been impressive, driven by the strong uptake of its cloud-based solutions across the life sciences industry. The gross profit margin has shown consistent improvement, rising from just under 55% in 2012 to over 70% in the most recent fiscal year. This trend underscores Veeva’s ability to scale efficiently while managing operational costs. The positive trajectory in profitability highlights a well-managed cost structure, allowing for continued reinvestment in R&D and strategic expansion.
Investor Insight: Sustained margin expansion speaks to the resilience and scalability of Veeva’s business model. The company's high-margin SaaS revenue is pivotal in maintaining its competitive edge.

b. Earnings Per Share (EPS) Growth
EPS has grown exponentially, particularly after 2016, showcasing the company’s robust operational execution. From negligible levels in 2012, EPS has surged past $3.50, reflecting effective management and growing profitability. This consistent rise in EPS has bolstered shareholder returns and underscores Veeva's capacity to deliver value in a competitive market.
Investor Takeaway: The steady growth in EPS suggests that Veeva is not only expanding its top line but also translating that growth into meaningful bottom-line performance. This is essential for sustaining long-term investor confidence.

c. Debt Management
Veeva’s balance sheet is a testament to prudent financial management. The company’s debt-to-equity ratio has consistently declined, underlining a conservative approach to leverage. Minimal net debt further strengthens its financial positioning, providing flexibility for strategic investments without exposure to excessive interest rate risk.
Strategic Advantage: A low reliance on debt positions Veeva well to navigate macroeconomic headwinds and capitalize on growth opportunities without compromising financial stability.

3. Strategic Positioning
a. Competitive Landscape
Veeva faces competition from industry heavyweights such as IQVIA, Oracle, Salesforce, and Medidata Solutions. Despite the competition, Veeva’s deep domain expertise and highly specialized offerings tailored to the life sciences sector give it a significant advantage. This niche focus creates high barriers to entry and fosters strong client loyalty.

Strategic Edge: Veeva’s reputation as a best-in-class provider for life sciences clients helps solidify its position in a market that values domain-specific solutions over generic offerings. Therefore, I believe Veeva has very good economic moat.

b. Recent Developments
Veeva has proactively expanded its product suite to align with market needs and future-proof its growth. Recent product launches like Veeva Pulse and upgrades to the Veeva Compass suite have reinforced its commitment to innovation. Moreover, the strategic focus on customer migration from legacy systems to the advanced Vault platform indicates a long-term growth trajectory rooted in client retention and product enhancement.

Investor Perspective: Continuous product evolution and strategic customer migrations are indicative of a forward-thinking company. These initiatives lay the groundwork for higher customer lifetime value and deeper market penetration.

4. Valuation and Future Outlook
a. Growth Prospects
Veeva’s future growth is bolstered by an increasing shift toward digital solutions in the life sciences sector. The ongoing rise in EPS signals that the company is well-positioned to translate top-line growth into substantial shareholder value. Additionally, its proven track record of innovation supports confidence in sustained expansion.

Key Driver: The continued focus on international market penetration and expanding the range of its development cloud offerings will be pivotal in maintaining Veeva’s growth trajectory.

b. Potential Risks
Despite its strengths, Veeva faces risks from larger tech players that may look to deepen their focus on life sciences. Additionally, the need for continuous product innovation to maintain a competitive edge adds pressure on R&D resources.

Risk Management: Veeva’s strategy to build strong customer relationships and maintain a high retention rate serves as a buffer against competitive pressures.

Catalyst
Veeva Systems Inc. stands as a model of financial discipline and strategic foresight. Its consistent revenue and margin growth, coupled with a solid balance sheet, position it for continued success in a highly regulated industry. As the life sciences sector becomes increasingly digitized, Veeva’s specialized solutions, proven operational efficiency, and low-risk profile make it an attractive investment for those looking for long-term value creation.