Is The King Dead? - Long Live the King!

Investing Strategies Abandoned Arctic Outpost #13
1

For a good long while SaaS has been King. And it has been a good, generous and profitable King - fattening portfolios and bank accounts across the entire spectrum of the investing world. But its no secret that for the last 12-18 months that the King has been ill - wasn’t thought to be terminal - just…you know, a little sick: maybe a really bad head cold or perhaps full blown flu. Or maybe just fatigue from working so hard for so long and just needed bed rest and some good old chicken soup. I dunno.

And then along comes a vibrant new challenger with perhaps more charisma and a refreshing vigor creating a renewed and exciting vision of perhaps greater, greatness and increasing profound prosperity: AI. But before investors crown the new market King it might be best to make sure the SaaS King is truly dead. Why?

Well…because…thats why. Perhaps the SaaS King market King is not dead. What if the AI King is just visiting to cement relations and has his very own Kingdom and the two Kingdoms will live in peace, harmony and prosperity side by side. Or - perhaps one King is actually not a King at all but represents more of a Lancelot to the others Arthur. Sigh - possible but then you have to figure out who is Lancelot and who is Arthur. Very vexing.

But then again - isn’t the AI Kingdom flood supposed to lift all boats? So…maybe there’s an initial migratory avalanche of AI picks and shovels - a temporary boom of Lancelots laying the groundwork for further SaaS advances with all reaping the benefit of AI stuff. There’s a lot to unwrap here and it might take me just about all weekend to figure it out - or, alternatively…just deciding to forget the entire thing and simply adding variety buffet items to my dinner plate. Or something like that.

So…is the SaaS King dead? From my cheap seats, many rows up. high among the stadium field lights where the air (and perhaps the brainpower) is somewhat thinner - the answer is not necessarily. In fact, the AI surge is almost guaranteed to re-invigorate the old King - albeit, perhaps not on the first incoming tide. And maybe not at all. So there - I feel much better that this is all decided.

So I suppose I’ll keep some remnants of the old kings reign and then add a couple of components to the new kings reign. But which ones? Another problem rears its ugly head. What I really need here is the smart kids figuring all this out so I can tag along. But for now - I suppose I have to go with a sort of esoteric mixture - something like you might see at a good Mardi Gras parade. Something Like this:

A) STARTERS

  1. Lancelot - Perhaps NVDA if it cools off a bit

  2. Old King - MNDY

  3. Lancelot - SMCI

  4. Old King - BILL

  5. ZS or S

B) Bench

  1. AMD

  2. ZS or S

  3. Lancelot - MRVL

  4. Lancelot - ANET

  5. Old King - TTD or GLBE

C) Scout Team

  1. AEHR
  2. IOT
  3. PLTR
  4. UPST
  5. PATH

There. Finally. Thought it might take the entire weekend to figure this all out. But wait…maybe thats not it at all. Sigh. Maybe I should do something else or in fact just the opposite of whatever I just decided is best. Maybe something else is best. What to do - what to do? And what about all the other myriad world wide companies that might catch fire given the AI juice?

Well…one thing is for sure: SaaS may or may not be dead - but AI is on Fiwa:

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwj8ssfy9JX_AhXJlWoFHcs8Dc8QtwJ6BAgNEAI&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3D1vT-VaMXsAw&usg=AOvVaw2CbZL09KOUEDr_wewx4mPJ

All the Best,
BDH Investing

12 Likes
2

Update:

  • Have cut ANET from consideration.

  • Move TTD to Bench #4.

  • Probably going to award a Scout Team contract to Symbotic and cut someone: But who?

  • And then there are MELI and MDB a couple of players that I really like: MDB has a solid career ahead of it but might have run past its blockers - while, MELI is like a Yo-Yo you can catch it low and sell it high. Over and over.

Investing is hard especially if you work at it.

All the Best,
BDH Investing.

4 Likes
3

Hey Champ,
I have been looking at ONON since the last time you brought it up. It is growing Revenue 78 percent YoY and grew 14 percent sequentially last quarter. They are profitable but have a negative FCF and they have 361 million in cash with no debt. Shoes make up the majority of their sales but they do have apparel and accessory items for sale also. Shoes grew 80 percent last quarter, apparel 40 percent and accessories 55.5 percent. Their shoe was worn by the winner of the Boston Marathon on the women’s side. P/S right now is 5.58 and their P/S range since inception has been 3.70 to 20.77. Interesting company and I bought a position today.

Edit:
Oh and they are growing faster than hoka did. They are at a run rate of 1.6 billion.

Andy

4 Likes
4

Hi Andy:

I’ve been checking in on it, off and on, over the last few days as well and sort of waiting for it to settle. It keeps getting pushed down my list a bit for Scout Team positions by some other companies, but I definitely think it has a nice future and my join you as a shareholder soon.

Thanks for the heads-up.

All the Best,

4 Likes