Bottle rock, buffet only invests in industries that are stable. So it becomes easier to predict 10 years into the future. It is easier to predict the market for candies and soda pop 10 years from now. That’s why he limited his investments to those markets. You simply can’t run your future cash flow models on ZS. And to do so is quite frankly a waste of time. Which is why he eschewed tech. Even his tech investments in mature companies have been terrible. In all regards, the guy “made it.” He became the wealthiest American in USA by investing in companies. On top of that he did it by investing in razor blades, candies, and soda pop. Mature industries. Where wealth is not easy to build. Even his biographer Robert Hagstrom failed to perform in n line with the S&P 500. But buffet cannot either now. He simply has too much money to invest and his businesses put off too much cash flow. Only the ill informed would ever doubt buffets prowess. Or say he’s irrelevant.
In regards to what you talk about though, none of it applies better to ZS. You want to totally revamp your security for an upstart (ZS)? ZS itself is making their own sales cycle longer by offering more and more products. Of course the sales cycle is getting longer. We just saw that with docu introducting cloud based products that for after the signature on contracts. Now which is more cumbersome and involving more thought/discussion. What to do with contracts or how to secure your enterprise? If there is any company out there that should get more leeway for long sales cycles, I vshould be ZS. Btw how will this make iboss any more competitive. Especially if vc dries up because bringing a cloud company public is no longer a guaranteed doubling your money? Zs nain competition is more and more incumbents. And the main competitior just doubled down on maintaining their appliance revenue rather than competing head to head with ZS.
As for the market being discerning. It already has been. Take a look at NTNX or TLND. Not exactly wealth building stocks.
I would say though. If conversations evolve around “is this a bubble?” It may not be time to double down on the industry in question. When you really have to sharpen the pencils to make a business case for still holding shares, it may be time to not be so bullish on the industry. And that’s what a lot of us were doing a few months ago. Not now though. So many things are cheap… as long as growth rates hold.
