Conviction
A firmly held belief or opinion
This is a word that has come up time and again this week. I think all of our conviction has been tested in recent days, if you’re a Fastly holder.
I’ve been finding myself recently caveating my posts along the lines that I am inexperienced, or that I don’t know this or that for sure. Which is true. This isn’t because I am doubting myself in my posts though, but because I don’t want anybody to simply ‘borrow’ my conviction. You don’t need to be experienced or the world’s best investor to have conviction.
Some of my posts have got more Rec’s than I’m used to recently and I’ve received a few emails over the months saying ‘thanks for your conviction I bought/held shares in X or Y’ and in a couple of situations it has worked out ok, ie with Zoom and Datadog. And I do appreciate the kind words. But if anyone had borrowed my conviction in Fastly a week or so ago (I’m not saying anyone did), and bought shares because of it - then what would they have done after the 30% drop this week and when they see Saul and others selling their positions? They probably would have sold for a 30% loss. I don’t want to be responsible for anyone losing money.
So this is why I think it’s important to develop your own conviction. I really DO have high levels of conviction in my holdings, reflected in aggressive % allocations, and I lay out my thinking as transparently as possible - but I really AM inexperienced, and so it’s important to know your sources of information. And when others have conviction in a position, to understand WHY, and to build your own conviction off the back of that information. Rather than just ‘borrowing’ it.
There are lots of great, experienced investors on this board to learn from and that is invaluable - the knowledge sharing. So there is an opportunity to listen and learn from them. But just because somebody has a different opinion to you, doesn’t mean you are necessarily wrong - have courage in your convictions.
This isn’t aimed at anybody, I just want to be as transparent as possible. I post on this board because I want to prompt discussion, encourage critical thinking but maybe most of all, selfishly, so that I can improve my own knowledge. By writing my views I want people to pick holes in any thesis, which I can look into and learn from, and ultimately grow or adjust my own conviction accordingly. And I suppose this is the reason for my influx of posts this week, I am testing the extent of my conviction in Fastly. I encourage anyone to do the same, it makes 30% drops like Tuesday easier to handle. This week may have been a learning curve for many of us newer to investing.
(Addendum: I had written the above, but was contemplating whether or not to post it to the board (after my excessive posts already this week), when coincidentally I received a very nice email from a board member saying they also consider themselves inexperienced and sometimes have self-doubts when their conviction goes against the sentiment of the board. So on the premise that there might be more people out there who can relate to this and might find this perspective useful, I have gone ahead and posted).