Company 8/27 Mkt Cap 9/26 Mkt Cap
Smartsheet 5.3b 4.3b
MongoDB 8.3b 7.0b
Alteryx 9.5b 7.5b
Zscaler 9.1b 6.9b
Crowdstrike 17.2b 12.6b
Above are some companies you can currently get a piece of, and their valuations are much, much lower than they were a month ago. To some, this may be a terrifying spectacle showing just how far the whims of the market can carry our stocks. To me, it’s opportunity.
I don’t think we can say for sure what these companies are worth. But they’re worth billions. How much do you think they’re worth? This might be the price you’ve been looking for.
…or prices could go lower still. But I’m not gambling on that. I’m stocking up while I have the chance.
Company 8/27 Mkt Cap 9/26 Mkt Cap Smartsheet 5.3b 4.3b MongoDB 8.3b 7.0b Alteryx 9.5b 7.5b Zscaler 9.1b 6.9b Crowdstrike 17.2b 12.6b
Above are some companies you can currently get a piece of, and their valuations are much, much lower than they were a month ago. To some, this may be a terrifying spectacle showing just how far the whims of the market can carry our stocks. To me, it’s opportunity.
I don’t think we can say for sure what these companies are worth. But they’re worth billions. How much do you think they’re worth? This might be the price you’ve been looking for.
…or prices could go lower still. But I’m not gambling on that. I’m stocking up while I have the chance.
Bear
Thanks for the perspective.
Another way to look at this (and tying into the thread on the current slide) is how some of our top stocks have fared this year even after the big slide:
All these returns still range from good to phenomenal.
And looking out longer term, these companies are still quite small ( EV ranging from $3.9 billion to $33.5 billion) with a long runway ahead. Will they follow a similar path to ADBE which has grown from a $28 billion company 5 years ago to $135 billion today? ADBE is growing revenues in the mid 20’s but all our companies are growing much faster. And ADBE is trading at 12 times forward sales - not dramatically cheaper (by this metric) than many of our companies despite significantly slower growth and a relatively massive enterprise value.
These are real companies with great products which dominate their niches, phenomenal growth and massive potential ahead. Perhaps not all will prosper longer term but their outlooks remain bright.
Sometimes it’s best to step back and not miss the forest for the trees.
“…or prices could go lower still. But I’m not gambling on that. I’m stocking up while I have the chance.”
in this market, there isn’t much of FOMO and more of FOLO. The market is up when there is good news on the Trade War but that do not necessarily help our stocks. And in this regime when the market is down, our stocks are still down.
It’s going to be a while.
I tend to agree, the market IMHO has repriced the momentum stocks (not just SaaS, but most everything that was a big winner and was highly valued) an average of about 30% lower then they were (anywhere from 20% to 50%, it seems). I think it could easily continue lower (especially if due to the overall market dropping for whatever reason). Or might hold here for awhile, until/unless our stocks “prove themselves” as winners by continuing to have stellar earnings reports. But I think this will take at least another quarter or two (quite possibly longer) before the money starts coming back into these shares.
I don’t know of a better place to put my money at this time, so I am hoping to patiently ride this out. And I’m still slowly deploying my remaining cash (down to about 10% now). Using it more slowly this time, as last year, in the Aug-Dec drop I ran out of cash around Nov, and wanted badly to put more funds to work in Dec, but didn’t have any available.
I think it could easily continue lower (especially if due to the overall market dropping for whatever reason). Or might hold here for awhile, until/unless our stocks “prove themselves” as winners by continuing to have stellar earnings reports. But I think this will take at least another quarter or two (quite possibly longer) before the money starts coming back into these shares.
I think you can have a little more hope, bc I believe it’s very possible that the Q results are exactly what get the stocks moving in the right direction again. I’m not calling a huge rally in November. But things don’t need to jump back up 50% or anything. Just 10% or 20% will make us start feeling better.
If everything just holds for another quarter or two, the TTM revenue numbers will be two quarters higher, so PS ratios will go down organically even if the stock prices hold, and these companies will be even MORE attractive than today. Sure, that’s entirely possible, but I wouldn’t hold out for that. I don’t need to tell you, though, because it sounds like you already came to the right conclusion: I am hoping to patiently ride this out. And I’m still slowly deploying my remaining cash
Even if things contract further over the next few months, that and the Q results will create a multiplier effect where the contracted PS ratio will fall even lower as TTM revenue goes up.
Conclusion: Either things turn around slowly and surely, or the spring gets coiled for a bigger bounce. Sure, I’m accentuating the positives here, but you left that part out. I just wanted to add in the more positive potential outcome (#1 above), and also look at the more negative outcomes (#2 and #3) in a more positive light.
I just wanted to add in the more positive potential outcome (