Jamin Ball "Cloud"ed Judgement (OT)

For growth stock data junkies like myself, I thought it would be reasonable to post this on the board as I think those of you who are interested in aggregated metrics and valuations of our favorite Saul stocks may benefit from the weekly analysis that Jamin Ball @ Altimeter Capital has been putting together over the past few years on cloud growth stocks with some fantastic visual graphs.

I did check past posts on this board and I know many of the top board members here follow Jamin Ball on Twitter and have referenced his work in context of their posts, but I wanted to point to him explicitly in this post because I only recently discovered him and I think he really does great work that may be useful to those looking to understand valuations of our favorite companies in a historical context, as well as leverage his insights on data and his perspective on cloud at the macro level.

Here’s Jamin’s substack - https://cloudedjudgement.substack.com/

I had seen a reference to this on one of the All In Podcast episodes I watched recently on YouTube, and ended up finding my way through Twitter to Jamin’s substack today and was pleasantly surprised with the depth and quality of data he’s crunching and presenting in visual form for us to consume.

Jamin started this weekly newsletter in June 2020 and has kept up with the weekly posts over the past year and a half.

For what it’s worth, Jamin tweeted yesterday the following “Median cloud software NTM revenue multiples hit a new recent low today at 9.2x. This is ~15% below where we were pre-covid”. I for one think that’s pretty crazy given the permanent state change that has occurred with covid that has accelerated the growth of our favorite companies. Our companies are not just a one-and-done with pull forward from COVID. Our companies have durable growth that will only continue to thrive many years into the future as the hybrid workforce settles in permanently.

The talking heads on TV will keep telling you that there’s a strong correlation between interest rates and growth stocks, and that with rising interest rates growth stocks will continue to get killed, but I’ve spent time modeling this data all the way back to 2004 with companies like Salesforce and I think most of these people have no idea what they are talking about based on actual cloud growth stock performance relative to interest rates over this timeframe. All they are looking at is the past 6 months and then making blanket statements about this correlation that doesn’t actually exist relative to our companies in a historical context.

I’ve never done an OT post before on this board, but I do think this qualifies as OT, so I think the protocol here is to send me a direct reply if you want, but otherwise leave this alone and don’t start an elongated thread that clogs the board (there’s been enough drama on that with UPST lately as it is).

Jamin’s Twitter - https://twitter.com/jaminball

As always, I hope you find this useful!