I was curious as to why there’s so much love for Cloudflare who is growing “just at 50-55%” vs. Crowdstrike that is growing 60%+ albeit decelerating.
I think it’s pretty clear, if we were to pick a #1 most important metric it would likely be revenue growth. Or would it?
Upstart grew 249% YoY last quarter. Why wouldn’t it be my #1 position? Because current revenue growth isn’t everything. You have to look at the whole picture, paying attention to how things are trending, and make guesses. That’s what “following the numbers” is. It’s not just looking at how much revenue grew last quarter. Durability of revenue growth is far more important.
I bolded “albeit decelerating” in your sentence above because I think those are the most important words. That is what I’m watching like a hawk, and trying to guess how it trends in the future. And I might very well be wrong, but I think CRWD will continue to slow, and NET might accelerate or at least stay steady. This is everything.
I hope that helps. It helps me to remember there is some guessing involved in what we do. We follow the numbers as best we can, but we don’t know the future. But the future is what matters – so we make the most educated guesses we can, based on how the numbers are trending.
Maybe instead of “follow the numbers” we should say “follow the trend.” It’s closer to what I do, anyway.
Bear
no position CRWD
less than 1% position NET (I like it, but I like others more)