A brief update on my positions and thoughts

Investment Analysis Clubs Saul’s Investing Discussions
41

Actually, I thought I heard it over on NPI in between all the political nanny nanny.
Either that or in the Comments section of a Seeking Alpha “Analyst” article.
My lawyer friend (who now is a huge Saul convert by the way) quoted some survey that said the comments were more on the money than any of the articles on Seeking Alpha. That’s where I heard how ENPH would sooner or later start producing. And while we are at it with hazy scientific statistics. . . .
I guess I have a subscription to LinkinIn but I never read it. I’m done working for someone in 2 months 22 days and 2.25 hours. But. . . I just got an email saying Solar Panel Installers was considered one of the highest jobs in demand for 2019. Ergo ENPH.
thanks also to Putnid who is 75% ENPH and C.J. Roberts who comments and writes for Seeking Alpha.

John

1 Like
42

I lose sleep if I own a stock that Saul doesn’t own.
But over on NPI Tinker talked about how, if RedHat dropping MongoDB didn’t the valuation, Amazon causing a temporary hiccup, not much more, and Google’s new version not even being mentioned, then maybe Tinker surmises that MongoDb has got all the big boys attention. Kinda like sincerest form of flattery.
So, that helped with lost sleep.
And, I am pretty sure, this was posted here on the Saul Index by PaulWBryant:

Patrick O’Shaughnessy has a podcast called “Invest Like the Best,” which I have seen mentioned on this board in the past. On the episode released today, he interviews Keith Rabois, who is now a venture capital investor, but who has also held senior positions at Paypal, LinkedIn, and Square.

Patrick pointed out that a lot of young companies get questions like, “Why are you doing this? Amazon’s just going to squash you.” He asked Keith if this actually happens.

Keith responded: “Yeah, I think it almost never happens. I’ve asked this question (and I never get a satisfactory answer, which probably suggests the answer) which is: Is there any high growth start up, and I can quantify what that means, but any start up that hit escape velocity, that a large competitor has ever, basically beat? And you have to struggle really hard through the history of the last 30 years to find examples, and so the fact that you have to struggle that hard to find examples suggests the answer, that that’s often true. It’s worth being consciously aware of, when an incumbent has unusual leverage, and understanding why your counter-leverage might offset that or not, so I think being paranoid is smart. But more typically, a focused, talented team with an ownership mentality and incentive alignment will out-execute a very large entity that on paper looks very threatening.”

Patrick: “Yeah, it’s a really interesting idea, and an encouraging one for smaller teams for sure.”

Keith: “Oh absolutely, I mean, this is the excitement behind silicon valley. We’re not all crazy.”

It’s interesting…we worry a lot about competition, but perhaps sustained revenue growth speaks for itself. I don’t think customers are stupid. Perhaps they’re spending their dollars with our companies because they need their products to succeed.

Just thought that was an interesting take.

Bear

12 Likes
43

About a week ago I had posted a breakdown of that stock overflow survey in response to another post here on Saul’s, maybe it got lost in the thread.

https://discussion.fool.com/the-open-source-project-that-i-perso…

Maybe you got the 100% from this.

Of 66,000 developers surveyed.

Mongo DB is #4 in use at 26%
The top three are MySQL, SQL Server, and PostregeSQL at 59, 41, and 33% respectively. All SQL databases.

The next NoSQL are Redis and Elasticsearch at 18% and 14%.

Amazon DynamoDB is way down at 5%.

And Cassandra at 3.7%.

As developers use more than one database, the numbers obviously don’t add up to 100%.

Under Most Wanted Database

https://insights.stackoverflow.com/survey/2018/#most-loved-d…

The numbers here add up to 100%

MongoDB is number 1 most wanted of all databases with 18.6%.
Elasticsearch is number 2 at 12.2%
Cassandra and Amazon DynamoDb both return about 6% on the most wanted list.

OK so MDB being most wanted by about 19% of developers (this is their choice for database they want to develop on most that they aren’t currently using) may not seem overly impressive. But its the second year in a row MDB was #1 in this category. There’s also 21 databases in the survey.

Looking at it another way, 50% more developers want to start using Mongo than the next 2 most wanted (Elastic and PostrgeSQL). 2x as many want to work with Mongo as the #4 Redis. And 3x as many want to start developing on Mongo as Cassandra or Amazon.

Would think that being foreward looking, that places Mongo in a good spot.

Darth

11 Likes
44

Denny,
Sorry, I don’t know the acros CaC and LTV. I probably should, maybe even did and have since forgotten. How about enlightening me (and others who don’t know them either, but didn’t ask)?

But irrespective of the meaning, I’m not sure that it would reflect the criteria I look for. The things Saul mentioned are all important, but to me the thing of vital importance is that the s/w, once bought into and in use becomes mission critical and deeply embedded in the business process.

Take Okta, if you’re not using it today, you’re getting the job done anyway. But once you start using it and it has wide deployment among the employee base, it’s really hard to walk away - make that near impossible. Why would you even go through all the turmoil of swapping it out for a competitor? It’s just not worth it unless there is a deep price differential (not likely).

Where I worked we went through more than one iteration of trying to reduce the application footprint. But the effort was largely directed at reducing redundancy, multiple applications that had been deployed in different divisions that did more or less the same thing. The notion was to pick the best of breed and phase out the others. But that was in the days of a lot of in house developed apps as well as license based COTS. I don’t recall a single app being under subscription, but I could be wrong, we’re talking thousands of apps, obviously I was not familiar with a lot of them.

When it came to mission critical deeply embedded s/w, even when there was considerable overlap, eliminating one in favor of the other was a non-starter. We had two primary PDMs (product data manager) in use in two different divisions. The divisions had almost entirely different customer base and very different products. So far as I know, both of those PDMs are still in use. I retired in 2010. It was just too costly and disruptive to consolidate down to one.

7 Likes
45

Saul,
Glad to see you changed your mind about MongoDB. I did not sell my position, in fact, MDB is one of my largest positions, pretty close to AYX and TWLO.

I’ve seen this movie before. I was there when Oracle was just introduced. I witnessed all the DB wars in my company (if you think techies are dispassionate, think again). I saw competitors come and go - and there were a lot of them. I watched the old Blue guard who discounted the whole relational technology in favor of the hierarchical IMS product they knew so well.

I also watched as Larry Ellison hyped every new release of Oracle, and then our evaluation guys would advise our DBAs to avoid most of the new bells and whistles as they had a tendency to be buggy, but they usually gave a green light to the prior release bells and whistles as the debugging had been pretty successful. In other words, we were pretty much one release behind with respect to what was being used.

And despite everything, Oracle just kept on getting bigger and pretty much took over the world. I could be wrong, but I pretty much see MDB going the same route. I was especially encouraged when the changed their license so that the free database could not be used as the basis of another company’s profitable application without compensation. I think this contract model will become commonplace for supported open source.

As for large enterprises taken advantage of the free open source code for internal development, I don’t see it as a threat. Big companies want a butt to kick if something goes wrong. They are willing to pay for it.

I think relational (Oracle) will not go away. There’s just too many use cases for which relational is ideal. But, there are so many more data formats that are now part of every business which just don’t play nice with a relational db. Mongo will rule - or so I see it. They have a huge runway and many years of hypergrowth in front of them. Eventually, just like everything else, they will approach saturation and the growth will taper, but that’s a long way off.

Welcome back.

22 Likes
46

Get in for 300% or stay out and hope for a 3% or 5% drop? And maybe miss it completely.

Thank you Saul for putting this in the right context.

Eddie

2 Likes
47

Hi brittlerock,

That was an excellent post. Thank you for sharing this first hand learned wisdom. Posts like this make Saul’s board extra-odrinary.

Thanks to posts like yours and also our sage Tinker’s continuous assertion that MDB is the best out there… I managed to not touch my MDB through last few months of AWS confusion times.

2 Likes
48

Saul,

Thanks for sharing your wisdom. Might be time for you to write another book. On a serious note I have personally done a better job at avoiding price anchoring and have continued to buy our “catagory crushers” all the way up during the last year (TWLO from 35 all the way up to 86+).

I have sold other holdings to raise some cash but I am now looking for some guidance on deployment of that cash. If I wanted to continue to add to my TWLO, MDB, ESTC, SQ OKYA positions do you advocate buying some each week for a month or so? I am not sure I have heard you address your thought process on when you “pull the trigger”. Assuming it’s not needed for living expenses what’s your mindset? In the past my tendency has been to continue to buy all at once with little or no regard to my entry point or how fast the stocks have risen. It’s worked but doesn’t sound all that rational.

Regards,

George

49

I have sold other holdings to raise some cash but I am now looking for some guidance on deployment of that cash. If I wanted to continue to add to my TWLO, MDB, ESTC, SQ OKYA positions do you advocate buying some each week for a month or so?..In the past my tendency has been to continue to buy all at once with little or no regard to my entry point or how fast the stocks have risen. It’s worked but doesn’t sound all that rational.

Hi George, I can’t really advise you about that because I don’t know your circumstances. If I was just increasing the number of shares in each position by 5% I’d probably just say, what the heck, and buy it now. If on the other hand I was increasing each position by 50%, considering the huge run ups all the ones you mentioned except Square have had, I’d probably add in stages as you suggested. Another issue is whether you are still working and have new money to invest each month, versus being retired like me with no new money coming in. I just bought all my position in MDB outright, but it’s just a 3.4% position as of now, and I used equally run up dollars to buy it by reducing my Alteryx by 3% as I described in the first post in this thread. I’m not so cautious when I’m transferring dollars from one run up company to another.

Hope that helps a little.

Saul

15 Likes
50

Thanks again Saul. I am still working and do have new money to invest each month, if this alters your philosophy on deploying available cash.

Regards,

George

51

Hi Matt,

Re: “I figure with Guardant Health, even though it will be only 4 months or less now until FDA approval, you can always buy back in.”

They are up over 35% since you posted that two weeks ago, any idea what sparked the run up?