“I assume he achieved his ranking over an extended period of time and am curious why someone would like his work but then disregard his conclusions?”
I rely on Bert’s work for software companies more than anyone else, and find his philosophy mostly compatible with mine and others here. That doesn’t mean we must agree on every tactic.
That Bert can miss out on Snowflake and a few others in the hyper growth sector and still be ranked on a rules based system as the number one analyst on the planet (which was his standing a year ago), reinforces how astounding the hypergrowth software space returns have been over the last 10 years.
I happen to disagree with Bert on two holdings, SNOW and NET, which he has avoided due to valuation. Perceived nose bleed values have caused me to sell those stocks in the past and then soon regret it. Having recently reentered at lower prices, my intention is to stay with them now for the duration.
What accounts for our different views on these two stocks is the importance of world class leadership. The way i look at it, Slootman and Prince have one in a million capability level with the vision and the executive capacity to build $1 trillion companies. IMO, companies tend to grow or shrink to the size of their leadership, almost regardless of products and markets. TAM is usually not much of an obstacle. They will position their companies to move to where the TAM is going. SNOW and NET therefore don’t look overvalued to me, rather they look like emerging behemoths.
Bert on the other hand, while does not dismiss the importance of good leadership, but may put less importance on it and considers variances in leaders to be centered around charisma (I agree charisma means nothing). This was discussed in Bert’s SA article comparing Cloudflaire vs Fastly about 5 months ago. For me standing Fastly’s CEO Bixby, a reasonably capably guy, up next to the giant visionary Prince, it’s not a difficult call on which is most likely to build the next world class technology company. Bert predicted FSLY would out perform NET over the subsequent 12 months, so far he is ahead, and i wouldn’t bet against him on that. I’ll take NET over the next 5 years.
Bottom line, Bert Hochfeld has proven over a long period of time that he is simply the best software stock analyst on the planet. But remember Buffett’s quote, “there are no called third strikes.” He became the world’s richest person at one point via stock investing while acknowledging that he avoided many successful stocks. Bert doesn’t recommend sells, like us here, he’s a long only guy. Therefore, that he overlooks a few gems doesn’t matter much when so many other gems are available to buy.