So in other words, Zoom will hit 1b rev run rate while growing at approx. 100%?
That’s insane.
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You are not listening Mr.Vee!
Peloton stock has also risen the last two days during the coronavirus selloff. I’m guessing traders think people will ride an exercise bicycle at home rather than go to the public gym.
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Sorry I’m going a little OT here but it’s useful to realize some things regarding COVID-19 as it relates to investing. I did a lot of research the last few days and I’ll say I’m not too concerned.
COVID-19 is not the flu. Not even close. So far the worldwide mortality, or death rate, is 2.1%. That is far less than any influenza outbreak that reached “epidemic” or “pandemic” status in history. The rate is likely far less than that given many infections are either subclinical or mild and go unreported.
I have taken advantage of the hysteria the last couple of days and bought shares of great companies at a discount. Not that it isn’t important but the mortality rate of this disease does not move the needle to warrant the hysteria I’ve seen in the media. The epidemiology just isn’t concerning. That’s my opinion as an MD. However, I’m not an ID physician or virologist so I reserve the right to be incorrect 
MC
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COVID-19 is not the flu. Not even close. So far the worldwide mortality, or death rate, is 2.1%. That is far less than any influenza outbreak that reached “epidemic” or “pandemic” status in history. The rate is likely far less than that given many infections are either subclinical or mild and go unreported.
The spanish flu of 1917 also only had a death rate of between 2-3%
Does any body know distinctions between that flu and the coronavirus that make this outbreak less threatening?
https://en.m.wikipedia.org/wiki/Spanish_flu#Around_the_globe…
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COVID-19 is not the flu. Not even close. So far the worldwide mortality, or death rate, is 2.1%.
Most likely, the real mortality rate (given the large number of undiagnosed cases) is somewhere below 1%. But that’s with intensive medical care for around 5% of the infected population. How many people can receive such care in the US simultaneously? Without ventilators and/or oxygen, the death rate is going to be substantially higher.
And even at 1%, if half of the US gets infected, that means 1.5 million deaths. This is not a small number.
The last time the flu killed that many people in the US was during the 1918-1920 pandemic.
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The spanish flu of 1917 also only had a death rate of between 2-3%
Does any body know distinctions between that flu and the coronavirus that make this outbreak less threatening?
The case mortality rate from the Spanish Flu was much higher than 2-3%. Wikipedia gives it as 2-20%.
The Spanish Flu also mainly killed the young, while Covid mostly kills the elderly.
Most likely, in 1918, the older generations had been exposed to a similar flu strain decades earlier, and had some resistance.
For the Coronavirus, there is no such latent resistance in the population at all.
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AD,
I completely agree with your points.
Most likely, the real mortality rate (given the large number of undiagnosed cases) is somewhere below 1%. But that’s with intensive medical care for around 5% of the infected population. How many people can receive such care in the US simultaneously? Without ventilators and/or oxygen, the death rate is going to be substantially higher.
It is the above that is causing the WHO and medical professionals such concern - hence the efforts being made to contain the virus.
Some public health systems in Europe are already struggling to cope with the day to day. They could not cope with a mass influx of patients requiring intensive care.
Note also that a number of young (presumably healthy) doctors in China also died from the disease. That is also causing concern.
Alex
The spanish flu of 1917 also only had a death rate of between 2-3%
Does any body know distinctions between that flu and the coronavirus that make this outbreak less threatening?
I think the difference is that a century later mass travel makes the same virus much more dangerous than back then when confinement was easier. Modern medicine might have the opposite effect. I think the “system” is just too complex to make accurate predictions.
I wasn’t too worried living in Portugal until the outbreak in Italy where I have cousins in Milan. The virus can hopscotch with ease. A South Korean airline pilot was discovered to be infected – how many in how many destinations did he infect.
Denny Schlesinger
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Some public health systems in Europe are already struggling to cope with the day to day.
Yes. The US has its own issues, in particular the fact that copays, deductibles and just lack of insurance incentivise people not to go to the doctor. Also, many jobs don’t offer sick pay, so many infected will show up to work.
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Diabolical, can you keep your doom and gloom comments off this board unless it pertains to the Companies we discuss here or valuable information on new up and coming prospects that adhere to the rules of this board. What you state may or may not have validation but as has been frequently stated in the Monday morning rules, it’s OT and not appreciated here.
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All this nervousness bewilders me because over the years, I’ve learned that the most successful investors don’t do panic selling. It’s an opportunity to select the quality stocks selling low because of all those panic sellers.
Things are always going to happen that shakes investors confidence in the market as a whole but really, if they sell everytime something happens, they are better off in a ETF or mutual fund and have an advisor hold their hands away from the sell button.
Lucky Dog
Just call your azz down!(dog speak)
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“A South Korean airline pilot was discovered to be infected – how many in how many destinations did he infect. “
And that Korean Air pilot was in Los Angeles, specifically hanging out in Korea town in the restaurants and bars. Eating, drinking, laughing with friends, touching glasses, dinnerware, plates, shaking hands, so how many people has he contaminated here in LA.
There is a list of restaurants already out that people are banning here. My wife is Korean, her parents and 4 sisters and their kids are all now avoiding many places. We were supposed to go to dinner last night in Koreatown and cancelled. People here are starting to freak out a bit. So yea this virus is scaring people close to home. You start having a breakout in the states, you’ll see the same panic you are seeing in China, South Korea and Italy, and it will effect “our” stocks as well.
My wife’s cousin was flying into LA from South Korea Monday and cancelled, and her entire family is somewhat relieved that she did.
TMB
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Sorry all and Saul.
Realizing this board is going really off topic, I should have at least made my above post somewhat on topic. So I’ll just add that this sell off Is really just giving us an opportunity to buy and or add shares to these great companies and I will continue to do so.
I added yesterday to AYX, TTD, CRWD, CRSP. I bought my first shares in DDOG finally, but those funds came from ZM which I just feel are priced to perfection. I know you feel differently.
TMB
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Zoom seems pretty clearly in a bubble.
That doesn’t mean they can’t also be growing nicely - we both remember the tech bubble/wreck of 1999-2002.
Bubbles can last a long time, though…you can make a ton if you sell out to greater fools near the top.
Naj,
Long AYX, AVLR, DDOG, MSFT, ADBE, FB, GOOG, IQV
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“Overvalued” has sure been safer, and our companies look like a safe haven in a storm! In fact, they have been! a safe haven in a storm.
For those who may have thought I was out of my mind praising an “overvalued” stock like Zoom, here’s some opinion from an analyst:
Bernstein analyst Zane Chrane says Zoom’s average daily downloads are up 90% on the prior 30-day period, while the user session per day increased by 17%. The firm calls Zoom a “port” in the coronavirus “storm.” … … Maybe he’s been reading our board?
According to Chrane’s analysis, Zoom has already added more new active users YTD than in all of 2019. !!! More new active users year-to-date than in all 2019!!! (This is still just February!) Still think I’m crazy?
Saul
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Sorry, here’s the link where I got it.
https://seekingalpha.com/news/3545923-bernstein-raises-this-…
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No Saul,
Thanks for posting that. I’m going to nibble back into my position in ZM.
TMB
And one last comment. I promise:
There are so many who feel that valuation is what counts. They make up their little tables rating companies by EV/S and decide “XXX is 22 times sales while YYY is 24 times sales, so XXX is the better pick.” They laugh at me because I pretty much ignore valuation (as evaluated by EV/S, for sure).
I thought that the following is a pretty interesting statistic. IJS is one of the three indexes I’ve followed long-tern. (The other two are the S&P and Russell 2000). The IJS tracks 600 small cap “value” stocks.
Right now, as I write, this index of “value” stocks is down 12% ytd, more than any of the other indexes. My portfolio of “insanely overvalued” stocks is up 22% plus. So who is insane here?
Saul
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Great content from Saul regarding Zoom download metrics. Zoom is a high conviction stock of mine. I have taken 12 positions in Zoom beginning at $64.75/share in April '19; with my latest position at $109.00/share which I added yesterday. The current circumstances have provided an amazing opportunity for Zoom to introduce themselves to an incredible number of new customers; providing them with the challenge to convert these new subscribers to paying customers. [Although its only speculation at this point as to what the split has been between free and paid onboarding.]
From the MarketWatch article earlier today:
"One question concerns what portion of the new Zoom user base is actually paying to use the service. Chrane expects that “a significant number” of these new users are using one of the company’s free options, including one-on-one meetings with an unlimited time frame or group meetings that last under 40 minutes.
Still, Zoom could benefit from converting some of these free users to paying accounts both in the near term and over the long run, as workplaces become more acquainted with the technology, he said.
“Zoom has added 3.5x more [monthly active users year to date] (through Feb. 24) than it did in 2019 (2.22 versus 0.64 million), so even if the conversion rate of new users to paid users is half of that seen in 2019, this would still yield 74% net new paid users in the first 8 weeks of 2020 versus 2019,” Chrane wrote.
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