Saul has suddenly realized he used to make bank for a few decades by focusing on PE and other things. Of course, the entire board will now morph and likely follow his lead, although I expect quite a few to stay loyal (at least in their own minds) to a strictly SaaS/Growth focus.
So many time on his board, I spoke out about how there was zero track record for expecting no-profit SaaS to command 40x PS multiples and somehow be amazing stocks to own, from a strictly CAGR point of view aka is my port growing every year.
So I am banned from that board for basically stating all the things that Saul is now finally openly stating. Which is hilarious and sad. Also funny to look back at old posts where Saul questions my port moves and tells me to open my own board (because he didn’t realize I had one) when I am LITERALLY the only guy I know on TMF who posts every single trade in just about real time.
You can’t make this stuff up, folks.
Case in point:
"I have no doubt many here can make good gains on ZM, CRWD, and DDOG in the short-term.
Don’t see how anyone can expect a quadruple, as you brought up, anytime in the next few years, as it would be market cap territory that is not common for sub-$1b or sub-$2b revenue runrate companies.
In today’s constantly changing/evolving/disruptive landscape, to imagine holding a $12/15/20b mkt cap for 3-4-5 years, when their P/S is currently over 40, seems like a setup for a fairly low CAGR in years 3-4-5, as you are getting multiple years priced in TODAY.
I get it…no one is supposed to argue with Saul, due to his track record…but here is the thing no one seems to grasp: there is no track record on $10b+ mkt cap companies with P/S over 40. From what I can tell, Saul made great CAGR for decades and P/E was a factor. I understand the “why” behind the switch to cloud/saas focus. In 2018, there was little care about profitability. Now, all of a sudden, we like to say there is. So what changes in 6-12-18 months from now?"
This was just a couple months before covid…Nov 2019. Reread that a few times.
and I continue:
"That smacks of momentum investing, with no reasonable expectation that a stock like DDOG will be held for 4 years, while sustaining a legacy-Saul-average CAGR of 25%+/year. And there is nothing wrong with momentum investing, but I have seen it stated by most on this board that they don’t believe they are momentum investing.
So, again: I am unaware that there is any established track record on $10b+ mkt cap companies with P/S over 40.
If there is, please let me know…I will be happy to be wrong.
Otherwise, you are declaring a truly new paradigm, and that “this time it’s different”."
Ok. I think I am moving on with my little chip on my shoulder from being excluded from that board. That same board that told me TTD was a bad idea (Bear in 2018 and others). That same board that told me GLBE was a bad idea (wsm, Saul, Bear, and others) in 2021. That same board that told putnid that he was irresponsible for his large ENPH investment. The same board that said “no TSLA discussions”.
Yep. That same board that for some reason thinks NOW is the right time to suddenly own TTD, GLBE, ENPH, and TSLA. Except for GLBE, most of the best gains for those stocks are either behind them or won’t happen from current entry levels.
Of course, all my bad ideas are great ideas if they decide to come up with them on their own. Ha.
Moving on…
Dreamer