MDB - another positive article

https://seekingalpha.com/article/4181032-mongodb-fast-growin…

The author is positive on the financials and long-term potential - he doesn’t understand the technology, but as long as he understands the business model I think his analysis is valid. He talks about the possibility of a buy-out. Usually I think buy-outs are great, but for MDB it would be a disaster for me - I want to hold 20 years!

I think MongoDB’s ARR expansion numbers are superb as compared to many other SaaS businesses. Additionally, I think MongoDB is really a marquee asset given I believe it will likely control a substantial portion of the database market in the future and the database is only growing in importance in the tech stack. Put another way, I think it is much more attractive to own a key player in the database market than a single-purpose SaaS business that is very good but only in a very specific niche – i.e., dental practice management SaaS software or something along those lines.

I believe MDB is trading at ~9.7x embedded subscription revenues and ~21x embedded EBITDA which I think is very attractive for a business with MongoDB’s growth potential and that is likely going to be a core part of the tech stack for years to come.

I have almost a double on my MDB position this morning, in less than 6 months! Not a big deal on this board I know, but I started with a big position. I may have to think about trimming my position, or it will crowd out my other stocks. Or should I just let it grow?

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“ I may have to think about trimming my position, or it will crowd out my other stocks. Or should I just let it grow?”

Unless it is time to sell I do not know why one sells their winners just to diversify into the less successful. My way of thinking anyways.

Is it time to sell Mongo, or are you doing what you think you should do just because?

If it helps you sleep, that is reason enough.

Tinker

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Unless it is time to sell I do not know why one sells their winners just to diversify into the less successful.

Good point Tinker. I usually don’t get nervous about my investments, even when it’s my blood in the streets. Maybe I shouldn’t worry about concentration, until I’m actually worried about it. Thanks.

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I am in the same boat with MDB this morning becoming my biggest holding at 17%.

I have decided to let my winners keep running. I have a large amount of FOMO on Mongo, and as long as the investment thesis stays intact, why risk selling a potential 10+ bagger just because of some weird need to invest in something I have less conviction in just because?

If you had NFLX or AMZN 10-15 years ago, would you have sold when their quarterly earnings we’re always smashing? The answer may have been yes, but in retrospect, do you think it was a bit foolish? If you’d still buy into the stock today even at it’s current valuation, then you’ve still got your answer.

If my biggest holding is my highest conviction, has the largest amount of runway ahead of them, and happens to over take my portfolio and become 40,50,60% of my portfolio, isn’t that a good problem to have?

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I have decided to let my winners keep running. I have a large amount of FOMO on Mongo, and as long as the investment thesis stays intact, why risk selling a potential 10+ bagger just because of some weird need to invest in something I have less conviction in just because

Fuma:

I agree completely. I have never understood investors “trimming” a winning position and yet “buying” a stock that has plummeted.

Sell the winners and buy the losers???

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Unless it is time to sell I do not know why one sells their winners just to diversify into the less successful. My way of thinking anyways.

I just reluctantly sold some SQ and SHOP in order to buy more PVTL.

Square and Shopify have been fantastic growers for me, and because of that both of them had grown to around 14% of my portfolio. I start getting nervous about a position when it gets to 12%. I know that does not bother you Tinker, but different strokes as they say. I have no source of investment income and I stay close to 100% invested, typically with less than 0.5% cash, at present that’s less than 0.1%. I seldom use margin and when I do, I tend to pay it back quickly.

So there you have it, when the percentage of a given position becomes “too large” and I feel like there’s a really good opportunity for reinvestment, I sell a portion of my winners.

As I have only one significant loser at present (NKTR), I don’t really have an alternative to selling my winners. Yes, I’ve read a lot of the analysis here and elsewhere about NKTR, I have a 5+% position. I’m comfortable with that and don’t think it advisable to sell it down and further. Even if we are a ways away from answers on 214, they applied for an NDA for 181 a day or two ago. I’m of the opinion that this will be a very well received pain therapy. Dontors are scrambling to get their chronic pain patients off opioid compounds due to all the bad press around the abuse of thees drugs. I know. My doctor weaned me off of oxycodone over a year ago. He offered no real alternative, so yes, my pain levels have gone up and my stamina has gone down. I would embrace 181 (whatever they call it) in a heartbeat if it works as indicated.

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If you had NFLX or AMZN 10-15 years ago, would you have sold when their quarterly earnings we’re always smashing? The answer may have been yes, but in retrospect, do you think it was a bit foolish? If you’d still buy into the stock today even at it’s current valuation, then you’ve still got your answer.

If my biggest holding is my highest conviction, has the largest amount of runway ahead of them, and happens to over take my portfolio and become 40,50,60% of my portfolio, isn’t that a good problem to have?

Funny you should say this, Fuma, since it’s exactly the position I’m in! I bought NFLX 10 years ago and have a split-adjusted average price of $18.62 in one portfolio and $9.64 in another. There were times I thought I should sell but held on, like the Qwikster debacle. At the time NFLX was a very small portion of my portfolio. But they have so excellently executed over the past few years they’ve outperformed the rest of my entire portfolio combined and are now literally a 50% position.

But, I still believe in them. Still feel they have a long runway to grow into, and still have no real competition. My strategy at this point is to find other NFLXs that will, over the next decade, grow into equally large positions, as NFLX will eventually begin to slow its growth.

And, since I’m quite a ways away from retirement, I can afford the time for these other businesses to grow.


Paul - who sometimes wants to trim some just to buy other things that look good, but then realize NFLX is still growing rapidly…

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I was waiting for a pullback on MDB that never came. Now it broken out $12 higher. Snooze you lose.

I agree completely. I have never understood investors “trimming” a winning position and yet “buying” a stock that has plummeted.

Sell the winners and buy the losers???

But you can trim a winner to buy another winner. For instance, I trimmed AYX yesterday (which had grown to 16.5% of my portfolio) to buy some MDB.

Chris

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I was waiting for a pullback on MDB that never came. Now it broken out $12 higher. Snooze you lose.

It’s not too late. This is a 20-yr story.

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I thought companies only got investigated when they crashed…perhaps someone wants to get shares at a lower price…

http://pdf.reuters.com/htmlnews/htmlnews.asp?i=43059c3bf0e37…

Jack

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Original quote: I was waiting for a pullback on MDB that never came.

Response: It’s not too late. This is a 20-yr story.

The jokester in me wants to say: Yes, sometime within the next 20 years MDB will have a pullback. Whether that represents an actual buying opportunity is unknown at this time.

As for what seems the obvious intent of the “20-yr story,” I’ll just point out that neither Saul nor the other main posting drivers on this board currently own any stock that they purchased 20 years ago. Amazon may be the epitome of LTBH stocks, but Saul sold his shares a while back. NetFlix hasn’t been public for 20 years yet. Both stocks have had multiple buying opportunities during their public tenure.

Heck, Amazon is up 45% YTD. Not bad for a large cap that supposedly didn’t have the right growth prospects, eh?

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Heck, Amazon is up 45% YTD. Not bad for a large cap that supposedly didn’t have the right growth prospects, eh?

And Netflix is up almost 100% YTD!

It’s still growing faster than any other single holding in my portfolio. And faster now than it was 10 years ago when I bought it!

Paul

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If there is any bubble in stock prices it is in large well known “growth” companies like AMZN and NFLX.
Has Netflix done anything this year to warrant that kind of price appreciation?

I put it down to the "everybody but me seems to be getting rich " syndrome as ordinary people start piling into the market. Investing in growth names they know like AMZN and NFLX. This can go on quite a while, but it is a sigh of a rapidly maturing bull market.

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And Netflix is up almost 100% YTD!

It’s still growing faster than any other single holding in my portfolio. And faster now than it was 10 years ago when I bought it!

And that’s because their subscriber growth is growing more than ever, and continues to increase, and that’s what they get valued on currently.

NFLX is my largest position, and I’m not taking any off the table as the runway for growth is still long with them. Subscriber count could easily increase 10 fold from here and they have incredible pricing power as most everyone looks at their service as the best value in entertainment!

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“And Netflix is up almost 100% YTD!”

NFLX has a market cap over that of DIS and I think rightly so. DIS as far as I know has a person(s) who green lights their programming projects like their movies and other content. If so, this is strictly old school same as networks have heads of programming to ok what gets on air. Recently I was driving around with my brother who has driven a truck around the city for decades. We were using GOOGL maps for directions and he said, I think I have a better way. I asked why he would think his way was better than GOOGL’s. He replied GOOGL can be wrong. What he didn’t understand is that all the people using GOOGL maps were streaming real time data to GOOGL maps as to traffic flow and so forth. They WERE NOT GUESSING as my brother was. NFLX has almost 21 years of the data as to it’s customers likes and dislikes and creates content accordingly. You might notice DIS latest movie SOLO has underperformed same with A Wrinkle in Time. When was the last time NFLX had a dud? DIS was taken by surprise by the drop in ESPN popularity. I haven’t heard of one though I am not closely attuned to this. Same as GOOGL, I don’t believe NFLX is guessing either. The only company with a similar trove of data on popular content might be AMZN with its AMZN Prime offerings. Anyway that’s my take.

Rob

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It’s not too late. This is a 20-yr story.

I disagree with you on MDB, SteppenWulf. I disagree with you on distributed databases vs traditional oltp a bit less (though I don’t think nosql will ever supplant oltp entirely), but in particular with Mongo because of the document model. It is easy to start with and that has paid dividends as a strategy, but I suspect in 3-5 generations products built off of it will find themselves in tough positions with document versioning and exponential maintenance complexity growth. You can still have structured data in k/v or wide column stores and enjoy the operational advantages of a distributed - you probably know of some of them, but probably the rest of the board does since they are all private.

That’s ignoring the more nuanced view towards data lake architecture, of which the operational database is a smaller piece and distributed transaction logs, stream processors, and search engines. Again, mostly private, so under the radar of readers here.

And if we really get to brass tacks, I suspect that more MDB customers than would care to admit would be far better off with a PostgresQL with jsonb column types and replication.

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A little bit more English AJM for us less versed…please.

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“A little bit more English AJM for us less versed…please.”

My post was intended for and addressed to SteppenWulf, who gives me every indication of being a competent and senior technologist in the field so I used relatively common terminology in the field of distributed and general databases.

If you have a more specific question about what I wrote, I can elaborate on a part of it for you.

@ajm @branmin - I generally believe that if you really understand something you can express it simply. In fact I think that half of technical language was created just to make specialists seem smarter than everyone else, when in reality most people can understand most topics if minimize the special vocabulary. I’m not trying to criticize, and of course you are trying to discuss a detailed topic, but as branmin expressed, I think in these public forums we all gain when we help each other understand our specialized areas of knowledge.

…Mongo because of the document model. It is easy to start with and that has paid dividends as a strategy, but I suspect in 3-5 generations products built off of it will find themselves in tough positions with document versioning and exponential maintenance complexity growth. You can still have structured data in k/v or wide column stores

So, I have to admit I don’t understand your arguments - maybe you overestimated my technical knowledge :slight_smile:

One area of confusion that I have is that MDB is not a distributed database. You can shard collections, but most current data stores, including most Sql databases, have a way of horizontally scaling across multiple machines. True distributed data stores are blockchain implementations and other types of distributed ledgers, and that technology is at least 5 years away, I estimate, from broad use for data storage - even then it will be for very specialized cases.

Secondly you talk about the difficulties of document versioning. I struggle to understand what you mean. To explain my understanding, in document oriented databases such as Mongo, the word “document” is an analogy. Instead of strict tables, columns, and rows like you have in sql, “document-oriented” data stores have collections, and each “document” inside it is analogous to a row in sql.

Mongo is also quite structured in practice - most collections in Mongo data designs have common data fields, the way that tables in sql have columns. The difference is that Mongo collections are flexible - individual documents can have different fields. In practice, in a well-designed Mongo database all documents in a collection have a subset of the fields supported by that collection. This is a very good fit with object-oriented design, by the way.

So, since documents aren’t really documents, but actually a type of flexible row, documents aren’t versioned in Mongo any more than sql rows are versioned. It is possible to keep history of a database - there are many different data patterns that help solve this very difficult problem - but most MongoDB databases won’t require it just as most Sql databases today don’t require it.

I know there are a lot of passionate Postgres users - I personally liked it 20 years ago when it was a hot new thing. But I really think we are talking about an order of magnitude difference between it and various NoSql data stores.

I agree that there are different types of NoSql - there are lots of specific cases for key-value, wide column, etc data stores. But I do believe document oriented databases are clearly winning as the general purpose database, because they work well for both structured and unstructured use cases.

Mongo is winning as the document oriented database, and this is likely to stand for the next 20 years. Don’t forget that Mongo won’t stand still - they already implemented the WiredTiger engine which allows all sorts of different flexible representations of your data.

You can expect that in a few years you will find kv, wide column, and blockchain all under the Mongo umbrella, and maybe all within the latest WiredTiger engine. That’s my prediction - you can call me on it in a few years.

By the way, I just found out I’ll be representing my bank at the upcoming MongoDB World conference, so I’ll ask the Mongo guys this question at the roundtable :slight_smile:

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