Take it or leave it, and certainly the point will not always be correct in all circumstances, and Saul can correct me if wrong, but I think his point is that (1) any stock can look good if you take a particular shorter term time range to demonstrate its prowess (here, CRWD has outperformed during the crash of the last 2 to 3 months or so), but (2) over the longer term, through the cyclical crashes, and even after the crash, the stocks with the better fundamentals (with SNOW being the exception that did not meet the rule (but then again SNOW is also a recent IPO that is still adjusting) that the stock with the better fundamentals are still much higher during the year 2021, and even now after the latest crash, than is CRWD.
Moving forward things may change of course. I thought CRWD’s earnings call was quite positive. I am not sure why they so low balled their 2026 goals, unless they really think things will really slow (and one can look at Palo Alto and see that 30% growth is sufficient to create large returns with Palo Alto (with a smaller multiple), but CRWD is projecting less than this with their 2026 goal. I am not really sure how to read into this 2026 projection other than it does project some vastly slowing revenue growth.
This all said, I have noticed this myself, through thick and thin, booms and crashes (and Saul has reiterated this point himself in the past) that even after the crash, the best hyper-growth, category dominant stocks, end up higher than they were a year ago or so, even at the bottom of annual crashes that come about. Sometimes more than just an annual crash. At this point CRWD has underperformed on those less subjective and selective time frames.
This is not a 100% rule, as most rules outside of physics and the hard sciences are not, but it is a good enough rule to enable confident systematic investing (unless of course the world materially changes on us - which it presently is, but I doubt such changes will be permanent, although this time it may be longer than we are use to).
As such, I don’t consider CRWD at this point to be a bad investment target at all. I think their earnings report was good. I just think the above is what Saul’s point was, and that point is sound and has been proven over and over again. People come here, tell us it is the end of the world with certainty and with a distasteful disdain for us and arrogance, and shockingly, even at the bottom of the end of the world were still up over (and usually materially) even at subsequent bottoms.
This time around we are probably in for a much bigger storm (probably, certainly as it has already hit and it is still hitting us). When the storm ends will Saul’s point be accurate again out the other side? Probably, yes.