Just four months ago!

Do any of you happen to remember the trolls who showed up on the board in mid-October, at the bottom of the horrible SaaS meltdown (when some of us, like me, were almost down to breakeven for the year! Horror of Horrors!!! :grinning:), to tell us that most of our overpriced stocks would probably NEVER see their July highs again. Well, of the eight of my stocks that are eligible (I just bought Afterpay), Coupa long ago hit new highs, and Datadog did as well, as did Trade Desk. Alteryx hit a new high intraday today, and Okta came within a percent. That’s five out of eight that have already seen their July highs again. My portfolio as a whole is up 49% since that bottom.

What’s the message? Whenever our stocks are down, these guys we never or rarely see, show up on the board to gloat. They are just jealous because we’ve been making huge gains and they’ve been playing it safe in ETF’s and Index funds. They love to tell us we are being punished for buying such overpriced stocks. Don’t let them panic you into selling out at the bottom. Think back now how scared you felt then. Write a physical or mental note to yourself not to get scared out. Even some of our stalwarts were worried that it might be a couple of years until we recovered. It’s scary when it happens!

We are really invested in companies that all the world needs, that have recurring revenue on subscription, that have no debt and low capital expenses, that are saving their customers money, not costing them, that have a positive net retention rate of 120% to 140% for most of them, and which are growing very rapidly (my top six positions, which make up over 90% of my portfolio, averaged 70% revenue growth last quarter).

That doesn’t mean that I know what they will do tomorrow (they may be down a bunch for all I know), but we aren’t in them for tomorrow. We are in them for the future.

I hope that this helps,




Write a physical or mental note to yourself not to get scared out.

A nice board member wrote gave a third alternative in an off-board email :grinning::

…This should be printed out and taped to everyone’s refrigerators…




Do any of you happen to remember the trolls who showed up on the board in mid-October, at the bottom of the horrible SaaS meltdown

I hope you don’t inadvertently give the “trolls” the attention they seek since that merely brings them back for more as the NPI can attest.

But for anyone wanting some nostalgia for what you actually did with this “meltdown”, here is the thread that discussed your moves because you did refine at the edges:


As you suggested, your core portfolio wasn’t sold away but you did take the downturn as an “opportunity” and made a a number of moves…most were pretty aggressive and pretty confident reallocations…but essentially you were largely buying (through reallocation from ZS, ESTC and TTD to COUP and DDOG).

So you were clearly not sitting on your hands as you reallocated.

I must say that you also give some very good advice about remembering what one did during these times and writing it down. This can be very helpful in determining if one’s thought process was logical at the time.

So what did your thought process yield for those moves since Oct lows, the return of the above stocks has been:

ZS up 51%
ESTC was flat
TTD up 53%

COUP up 33%
DDOG up 65%

Since ESTC was already such a small portion of your portfolio, call it a draw?

I like the thought process of reallocating at times of market distress…you have done that quite a few times in past as I recall in 2008 for example and 2000? But in this case, not sure it made much difference.


Hi Duma, it should be noted that I stayed fully invested in my high growth SaaS stocks, and that the changes I made had nothing to do with the market being down. I reduced Zscaler because the story had deteriorated, and exited Elastic because I just couldn’t get comfortable with its story, and reduced my Trade Desk because I just didn’t have as much faith in an advertising company, no matter how smart the CEO was, as I did in our SaaS companies, and I added a lot to Datadog and Crowdstrike because I loved the companies, and added a little to Coupa too (whose story had turned for the good, and which thus had refused to go down very much and was the first to make new highs), and then took a little position in Afterpay. This was all about my choice of investments, rather than reacting to the ups and downs of the market.



No supply chain issues either.



This discussion seems to give credence to my “do nothing” meme. This is of course a phrase of art where basically you do nothing (except systematically add) unless there is a compelling reason to do something.

I did similar to Saul actually, but I held on to a larger portion of Zscaler (was not gonna let it go at a panic bottom) but yeah something compelling happened, the story diverged from reality. Actually started discussing this last summer because of the top down selling business model and the math dictated that Zscaler needs to grow its new customer base each year (meaning not just add but grow how many you add each year) to maintain growth. But I let that slide - sometimes you do, sometimes you don’t.

I do eventually get out of Zscaler after the bounce and re-allocated to even better things. Primarily Alteryx.

Some think given how much I grew my Alteryx holdings I maybe should do some more reallocating again…that is another conversation.

Anyways, do nothing unless compelling reasons compel you to do something is a good discipline I think. I discovered that no matter how many times I’d “miraculously” find FUD related bottoms for quick large gains, that in the end I’d probably not be worse off, and possibly better off just “doing nothing”.

Btw/ moving to buy something else that I find irresistible can be a reason to do something. So it’s not just buy and hold by and means. Just as a strong bias, do nothing until that bias is strongly overcome.

Stops panic, keeps your eye on RARE (not all) opportunities) and you have to work much less for same or better results.

But each to their own. And yeah, it does make me very picky about where I first buy (as I always buy big the first time because I was compelled) and I need to be very confident in what I bought as a business and it’s price (I want to buy where I know the price, on lure fundamentals will return in a reasonable period of time even if things go chaotic for awhile). Risk/reward in that regard.

Perhaps another slogan to put around. Do nothing, while understanding its a term of art and not meant to be taken literally.

I have found not following this rule has cost me money when I stray too far from it.



Indeed, the retraction (I refrain from terms like “meltdown”) was scary. I was surprised by own reaction. I’ve mentioned this before, but it warrants repeating. I thought I was mentally prepared for it. I wasn’t. I knew it was inevitable. I knew the market does not march in only one direction. But the extent of the retreat had me worried. I became somewhat panicky. I was worried and a bit overwrought (words like that always give me pause, can you be underwroght - OT, I know).

Although I was concerned and not in a good way, at first I did nothing. I kept reassuring myself and also read reassuring commentary, all of it on this board. The general market commentary either ignored it because the retreat was not market-wide, it was pretty well focused on tech stocks. Or if there was commentary in the financial press it was pretty uniformly negative - at least that’s my recollection. So I did nothing because nothing seemed to be the most appropriate thing to do. As I thought about it, I just couldn’t see what had really changed. As far as I could determine, the only significant change was the price of most all my positions. But from a business perspective, nothing disruptive had occurred. Nothing that would generally impact virtually all my holdings. And, in fact my portfolio never dipped below the starting position for the year. For that matter, even at the nadir I was still up around 25% for the year. My goal has always been 20% a year which seemed like an achievable stretch goal at the time. I had just become spoiled by having had performance beyond my wildest notions when I first decide to take this investing stuff seriously (that would be 2016).

But, as I continued to scratch my head, I did decide to make a few changes, not because of contraction (although that’s what motivated me) but because in my estimation there was a change in the business outlook for ZS and MDB. In general, I’m reluctant to sell. Part of that is due to irrational thoughts like, “it’s only a paper loss until you sell and lock it in,” but more rationally because if you are committed to staying fully invested selling implies buying. You have to be right twice. So, unknowingly, generally I took Tinker’s advice, do nothing.

But specifically, the story about ZS and MDB had changed. I needn’t go into details, if you’ve followed this board for a while you will already know, in fact, I think it’s summarized in this thread. I cut both positions about 50%. I still like both companies longer term, but “longer term” is very ambiguous. I felt both positions were overweight for the here and now. As someone on this board posted a while ago, we need to practice ruthless allocation of money.

I started relatively small positions in ZM and COUP. I also initiated a fairly large position in DDOG (BTW, I really don’t like the company name). I also added quite a lot to my already large positions in CRWD and AYX.

Did I make good decisions? To be honest, I have not assessed where I would be today had I done nothing at all. Part of that is just laziness, it wouldn’t be a big effort, but I just haven’t taken the time to do so. But then there’s also the question of what useful information will I gain from the exercise? I can’t go back and revise my decisions. And the actions were so specific, there’s no general lesson to be learned.

Will knowing if I made the right decisions change anything in the future? I can’t imagine what changes I would make. In other words, there’s no new process information to be gained no matter what the outcome. Next time (and I’m confident that there will be a next time) I will go through the same process (well maybe I will forgo some of the panic). But the process of assessing if there has been substantive changes in general won’t change. As for making allocation adjustments, in theory I do that on an on-going basis, though when things are going well, I’m prone to be less attentive. That’s my bad, but there’s no lessons from the second half of last year that will alter that.


Write a physical or mental note to yourself not to get scared out.

A nice board member wrote gave a third alternative in an off-board email :grinning::

…This should be printed out and taped to everyone’s refrigerators…

I follow what I call the “Half of Inch of Water” Rule…

I found this board a while back via a generous referral from another former PRO subscriber. I’ve read and learned and bought stocks I grew to know and like in increments and a lot (for me) of AYX and CRWD when they dipped.

I’m very appreciative of the talent, insights, and discussions here (and at times in awe), but only on rare occasion do I think I can contribute. This might or might not be a time.

So in a modest effort to add a pinch of something I offer up the “Half of Inch of Water” Rule as a partial token of thanks. The Rule helps me sit on my hands despite FUD and trolls, and the humor takes a bite out of rough waters and allows me hold on to a balanced perspective (and take advantage of the occasional stock sale).

The Rule comes via the chorus of a John Prine song that goes like this:

That’s the way the world goes ’round.
You’re up one day, the next you’re down.
It’s a half an inch of water and you think you’re gonna drown.
That’s the way the world goes ’round.

Sums up quite a lot of things – and for me works in this case too…

Best, Barry