Rough month for the portfolio. Worst since May. As Saul said though, indexes hitting bear lows while we’re still elevated from our lows.
Started the month out with a flurry. Closed out MongoDB after hours after their earnings call. Also trimmed from ZScaler as it got a bit heavier than I wanted after their report and also trimmed Snowflake as it had grown to 25% of my portfolio.
Allocated the funds from my sales to Sentinel One, Bill, Cloudflare & opened a small 5% position in Tesla.
Tesla is not normally in my wheelhouse due to how large they are but there are very many catalyst reasons that I want some exposure to it. Its mostly OT for this board so I won’t get into the details here. I re-allocated some of my heavier position funds to it and have it sitting around 5%. I plan to keep it around 5%.
I posted this the other day but going to put it here again.
There are lots of reasons I sold out of MDB. Indeed, before the call and after release of the earnings, I was still going to hold on to my shares. Yes, I saw how much Atlas slowed and that is a big concern, but it wasn’t until listening to the call and hearing macro macro macro combined with their reasons for Atlas and overall slowdowns and what they need to do in the future to be successful that I realized my thesis is wrong and sold out. Now, it could still be very successful but not in the way I thought it would. Let me explain.
Well, first, databases and applications ARE mission critical. If the Atlas usage slowed so much, why?
MDB mentioned something on the call about having their sales staff call current customers trying to get them to use their current applications more… This seems a bit odd to me.
“Hi, this is FF, your MongoDB sales rep, we noticed you aren’t using your applications running on MDB as much as you were last quarter. Can you please start using those again?”
Is it possible the applications running on MDB in general aren’t as mission critical as applications running on other database platforms. It does make sense as SQL database platforms are much more mature, especially around security and other pieces.
The other alarming thing I heard on the call was discussion on what it will take for MongoDB to be successful in the future. The requirement of new workload types and such and selling/convincing customers of these. So… while innovations are very important for every company, CRWD, SNOW, ZSetc… all have futures that can be very bright with the current products. Sure, they’re continuing to innovate to make it brighter but SNOW’s success in the future isn’t dependent on say, UNISTORE becoming a success. This puts the MDB future more in a bit more speculative bucket than I previously was thinking.
However, if a company is dependent on more and new workloads being on their platform, then they better be coming out with massive innovations so valuable that other platforms do not have those. Cloudflare’s R2, D1 (hopefully R2D2 soon) is a prime example. Snowflake’s secure edges are another. These are both things that others simply don’t have or can’t offer, or are trying to follow with.
What are the innovations for MongoDB?
Glad you asked. They’ve been touting two.
- Encryption while querying data (EXPRESSIVE QUERIES)
- Tool to migrate data from a SQL/table structure to a MDB storage format
These are not cutting edge changes. The first one is something that SQL databases have had for many years. Indeed, Mongo is in the chase position in security. SQL Server has had this feature for so long now that the first version with it is considered LEGACY!! Its in EXTENDED SUPPORT (meaning no more patches unless a company pays for it because that product is so old).
Mongo’s press release for this was technically accurate though but unless you really understand databases, you won’t pick up on the tricky piece. Most transactional databases are SQL databases. Queries are writen in the SQL language. MongoDB is NOT a SQL database. So yes, the presser is accurate but in my opnion it was misleading. Mongo is the first database to offer queryable encryption with EXPRESSIVE QUERIES. NOT the first to offer queryable encryption.
The second one innovation, a tool to migrate data to MongoDB from SQL/table data. Great! Again, its definitely needed. HOWEVER, moving the data is not the hurdle to migrating from a SQL database to a NoSQL (MongoDB) database. The biggest hurdle is the CODE to access the data. A company will need to change ALL the code of a system that interact with the database.
So back to my point, these are not world changing features, ESPECIALLY if the MDB future is dependent upon innovation.
There were more but these to me were the biggest issues. I could be off on some of them but… the questions raised here are so big that I’m not willing to hold on to see if I’m understanding this correctly. Therefore, sold and re-allocated to other companies with much clearer futures.
I hope I’m wrong here and my friends who are still in Mongo will be wealthier than I due to holding on to Mongo.