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
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
“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
Sorry, here’s the link where I got it.
https://seekingalpha.com/news/3545923-bernstein-raises-this-…
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
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.
I sold out of everything except Alteryx last Thursday. (so much for my “rule breaker portfolio”! Lesson learned about hanging onto low conviction names. Luckily, I had a fortuitous exit.)
Yesterday I bought back in to Roku and today I bought into Pinterest. I have been thinking about DataDog as well, but I am nervous about it. I can’t shake the fear that tomorrow’s Datadog is today’s New Relic. I’m still trying to figure out if monitoring is a field where a company can maintain its leadership position, or if it is like security where it seems like there’s always someone new knocking on the door.
Zoom is a stock that I would definitely like to buy back into but I am not sure if now is the best time for me to start a new position. I can’t see it do anything but drop after earnings, which are coming up. People have made a lot of money in the name, and it will have to be an absolutely monster beat to stave off profit taking at its current valuation. That said, if the situation is truly giving them such a huge tailwind, that monster beat may just happen.
I feel like there’s about an equal chance to see this stock at $75 or $150.
The school where I teach just asked teachers to figure out a way to do online teaching if the school needs to close for a bit of time. Zoom is a great product for meeting with a class all at once. (Now the school just needs to train everyone in how to set up meetings with students…)
Or they just use the free Google Hangouts already at their disposal with the (likely) chromebooks all the kids are using.
The schools use Google Drive and share docs, syllabus materials, etc etc…
Zoom as the only option for video is a non-starter for me. I don’t know where this is coming from, but it isn’t the real world.
Dreamer
Well, 3+ months later it seems I was completely wrong on the direction of the stock price of Zoom. I think it’s doubled since I said it was in a bubble.
Doesn’t matter if I was early or wrong, it’s the same thing. Zoom holders were right.
Naj,
Still long AYX, AVLR, DDOG, ADBE, ADSK, MSFT et al
Don’t worry about it, Naj. I’m wrong so often that I’m thinking of pitching a new service to TMF called “Get Rich Doing The Opposite Of What Eric Does”. It’s guaranteed! 
I was so sure that ZM would drop after earnings for being only “very very good” rather than “the absolute best ever” that I sold a bit less than half my holding before close of market on earnings day, then when it was clear I was wrong (as usual), I managed to buy it back on a dip later in after-hours. I think I lost about $30 total, cheap lesson.
Eric (long ZM and learned my lesson)