Newbie. Suggested Entry Points

I am getting up to speed on the rules of board from knowledge base. Spent time reviewing Portfolio updates from @SaulR80683, @TMFRob, @PaulWBryant, @GauchoChris, @stocknovice, @Retirementdough, @mekong22, @XMFBreakerForce, @Gilligandopolis.

Incredible insights as to why every one did what they did.

AYX, DDOG, CRWD, OKTA, TTD are some of the common names in every one's portfolio. They are 

Stock  Price.   Below 53wk high. Dec 2018 Low

AYX    $110     -30%              $51
COUP.  $124.    -28%
CRWD   $154.    -55%
DDOG.   $37.    -25%
OKTA.  $115.    -18%              $54
SHOP.  $430.    -21%             $119
TTD.   $229.    -27%             $104
ZOOM.  $112.    -10%

I am a retired IT guy who used to a decision maker for a large company. 

Based on the discussions on this board and my own experience, I like AYX, DDOG. When I buy stocks now, they seem to go down more. With Gap opening, there is wild swings in prices. There is expectation of another 15% down in S&P 500. I would like to pace my buying.

If I were to put some limit orders, do you have any suggestions on what could be excellent entry points for some of these stocks?
 
Thank you all for sharing!
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Hi Growth,

I appreciate your question, as the answer would certainly prove of great value. But, it would lead to a discussion of market timing and, likely, TA…both of which are OT for this board.

Furthermore, given current market conditions, nobody can predict short term entry points with any degree of certainty. But all on the board would probably agree that the stocks you listed would make great investments and you’ve been given the gift of buying in on a discount.

FWIW, I’ve been nibbling AYX, ROKU, FSLY, CRWD, TLRA, and DDOG this morning.

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Thank you for informing of the rule on market timing. Will avoid distracting the board with questions around market timing.

I was trying to get an informed view on which businesses are on sale relative to their growth opportunity.

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Hopefully I manage to keep this on topic for the board.

I see others on this board that have ratios of investment that they use to guide their commitment to a stock. This doesn’t seem to show up on any other boards, but it is something I have done for a long time, so nice to see others doing it.

My portfolio has 5 categories of stock…1)Strong commitment, almost buy and forget >5% positions, 2)Things have been going good, I like these stocks 3-5% positions, 3) Very interesting stocks, and lots of good information about them 1-2% positions, 4) Stocks that catch my eye, but I really need to study them more <1% positions, 5)Completely speculative but prolly fun to own stocks in the .05% range [like Virgin Galactic].

After over a year of having Saul’s board on my reading list, Fooldom recs started leading me here more and more. That means I am relatively new to this SAAS/PAAS/IAAS space of investing.

Right now, with the pull backs I have added to many of my stocks based on the discussions here.

ROKU is now a 5%'er. I love their move into actual branded TV’s and that they are earning more from ad revenues. They also have some power when it comes to channels, as seen by channels caving to Roku’s position recently.

DDOG has moved into a >2%'er position because it seems to be doing better than MDB. I believe this board likes DDOG better, and it I see that DDOG is growing customers faster.

MDB is not a buy at me for this time. I have too much of it, and I really don’t follow it. It will be reduced to a <1%

Zoom has come back to my original buy price, so I have gotten more. I have Zoom now up to a 1% position. I like the idea, but I have seen too many WebEx’s over the years to get fully excited on this one.

AYX has been added to, but I am still looking for a better price. That means not a full position for me yet. Not jumping full in until I have more understanding of the company, mostly buying because its a Rec and everyone here loves it. LOL.

TTD is one of my smaller positions of stocks here. It is in the <1% position and I am really not sure I have confidence in a moat at this business. I get that it is all the rage and that margins are great, but what stops them from being disrupted? (This is also the reason I don’t own ANY Crowdstrike. I watched money waste away in Akami for too many years.) So not buying more even at this price.

Hopefully no market timing to get us banned, but more along the lines of maybe a portfolio review, which I have never done here. :slight_smile:

CRWD is due to report next week. Can anyone think of any reason why the recent economic troubles should change anything about their business prospects? More online activity seems like more online security is warranted.

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The thing I’m thinking about is the go-to-market sales motions.

With all of these companies putting in place work-from-home sanctions, how does that affect sales in the short-term?

It seems like the companies with mainly top-down motions will suffer more than the bottom-up.

If anyone is in software sales, it would be helpful to understand your perspective.

Is it possible to close a lot of deals virtually? What do the up-sell motions look like when reps aren’t in-person? Are quotas being changed because of this?

I can see this affecting CRWD and AYX more than say a DDOG or ESTC because of the sales motions.

With that said, it’s likely a shorter term problem but my gut says that is why the market has turned sour on our SaaS companies.

Best,
Fish

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Is it possible to close a lot of deals virtually? What do the up-sell motions look like when reps aren’t in-person? Are quotas being changed because of this?

It might affect casual, “I’m in town, let me take you and your check-writing boss to lunch” sales opportunities. But I spend money for my company (other products though). The physical presence or absence of a sales person is near irrelevant TO ME. Others who spend company cash may have a different opinion. But when I need a new compiler, or upgrade of a development tool, waiting for a visit is an irritant, not a plus.

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The thing I’m thinking about is the go-to-market sales motions. With all of these companies putting in place work-from-home sanctions, how does that affect sales in the short-term? It seems like the companies with mainly top-down motions will suffer more than the bottom-up.

If anyone is in software sales, it would be helpful to understand your perspective. Is it possible to close a lot of deals virtually? What do the up-sell motions look like when reps aren’t in-person? Are quotas being changed because of this? I can see this affecting CRWD and AYX more than say a DDOG or ESTC because of the sales motions.

With that said, it’s likely a shorter term problem but my gut says that is why the market has turned sour on our SaaS companies.

Hi Fish
Let’s look at that. The five market indexes I follow currently average down 19.6% year-to-date, at 80.4% of where they started. Our SaaS companies, as represented by my rather typical portfolio, is currently up 0.9% year to date, at 100.9% of where it started.

As 100.9 is 125.5% of 80.4, money put in our stocks on Jan 1st would be worth over 25% more than the same amount of money put into the general market. In other words, our SaaS companies are doing a little over 25% better than the market indexes year-to-date. I think it is a stretch to say that the market has turned sour on our SaaS stocks. The market has turned sour on the market, but much less so on our companies.

Saul

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Hi,

In times like these, large companies focus on earnings management. They tend to freeze headcount and any new expenses including technology purchases. Security related technology or services are given exception if there is an immediate need. With potentially all the employees & clients working from home, lack of capacity for ‘working from home’ services would become visible resulting in buying more capacity. The obvious ones are Zoom, WebEx, Skype etc. Anything that takes a long time to implement would get postponed.

My guess would be sales of technology services would take a hit in the short term due to employees of clients and sales teams of tech companies working from home. Decision makers would be focused on Covid-19 virus management issues rather than meeting vendors.

The sales cycle would be longer.

My 2 cents.

Growth2020

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My guess would be sales of technology services would take a hit in the short term due to employees of clients and sales teams of tech companies working from home. Decision makers would be focused on Covid-19 virus management issues rather than meeting vendors.

The sales cycle would be longer.

Yes, I am unsure how it will affect most of our technology companies. My initial thought was that it won’t affect them too much. They aren’t linked to travel or entertainment which is being curtailed so much. But the drastic measures being taken by government officials and others has me rethinking this assumption. I’m not worried about the virus but I’m worried about the likely misguided reactions of those in positions of power - the futures are down another 4% on the just announced European travel ban. I know that some companies like ZM should benefit. I suspect ecommerce should benefit. But I’m not sure. Others might lose business due to difficulty with their sales process or due to an overall economic downturn. Growth companies might be the most affected. It would be interesting to hear from those in the tech industry in this regard. My overall impression is that this sell off is completely irrational since any effects should be temporary. But for now, my portfolio is getting crushed so this impression is not a consolation. Companies that had great quarters (like AYX and others) have had their stock prices collapse 30% or more from recent highs. I don’t have ZM which has cushioned the fall for some here.

I just spoke with a friend in Palo Alto who isn’t in the tech industry but has many friends who are. He didn’t think their businesses were suffering initially and everybody was just working from home. But people aren’t going out too much, even to restaurants, so the non tech economy may be suffering and this may have ripple effects which impacts tech.

Are these rational stock price drops?

Are others worried about the impact on our hyper growth companies?

Are others just staying the course and absorbing the losses or are they making other moves, maybe buying certain stocks on sale?

Dave

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I reduced everything but ZOOM to a token status.

“Show me the money”

I now own IEF , 7/10 year treasuries. This is not working out well. Added SDS, inverse ETF.

Danger Will Robinson!

Probably been better in cash.

I do not know what the market will do tomorrow. I do know that AYX, CRWD, DDOG, and TTD are great companies. It was difficult for
me to reduce my holding in them. Still, I
wanna see green, not red. Additionally, we are just getting started. Some
of us on this board will be dead before the end of the year. Very few realize just how scary it will get.

The game is not over and we are not at the bottom. Not even close.

By the way, I still have a full position in ZOOM and and a tiny position in Teledoc.TDOC.

Cheers
Qazulight

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I am being honest. I am 60. So far 94 percent of the deaths have been over 50.

Add in risk factors such as heart disease, obesity and smoking and the probability of surviving drops this disease can drop as low as 1 in 5.

However, I will note, the total infection of Hubei province was between 0.11 percent and 1.1 percent.

So the chance of a high risk person contracting and dying from this disease is probably between 0.2 and 0.02 percent if the country is able to
control it like the Chinese did.

I actually expect that we all will lose someone, or our own lives before the end of the year. I also expect that the bottom for this market may happen before the end of the year.

Cheers
Qazulight (Dying is part of living, see ya on the other side(

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I am 64 and a cancer survivor with 2 rounds of chemo in the last 4 years. Knowing what I know now, I believe I had the virus in early January after a 12 hour stop over in Amsterdam following a Christmas vacation. Spent 2 days in bed with a terrible cough, congestion and a slight fever. Took 3 weeks to fully recover. So my advice - eat lots more fruits and vegetables, frozen if you don’t have fresh - avoid dairy and meat as much as possible, drink lots of water and keep positive!!!

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The Spanish flu of 1918 killed 50 million people. Most not on the United States, but still was material. The death rate based upon the population of the world was .00125 percent. Assuming 1000 people read this board, all things being equal, of those 1000 .00125 of each 100 would die. Of the thousand the. .0125 will die.

The Spanish Flu is far deadlier than Coronavirus will ever be.

Thus mathematically, even with the worse pandemic of the last century and a half, the math says ZIPPO will die from the Spanish flu. Much less this virus from the board members.

I don’t have the odds, but I imagine the death rate from driving is higher or not much lower anyways - even than the Spanish flu, much less this pandemic.

So if idiots who can’t do math are done. Let’s move on as this is off topic and I only respond because fear mongers who can’t do math deserve a response.

Move on.

Btw it is irrational sensationalism like this which will cause an overreaction in the market that we, if patient, can certainly benefit from as investors.

No, the world is not ending and no, the world population will not be trimmed by this.

Tinker

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I stand corrected, little zero error, if this were the Spanish flu, and all things being equal, the death rate was .0125 or 1.25 out of every 100. Coronavirus will be at least 10x if not a multiple less deadly. Same result statistically.

Did not want to mess up the math. If every person on the planet got coronavirus best estimate of death toll is 36 million or .006.

For whatever that math is worth. To date barely more than 100,000 people have it w only 20 new cases in China this week. So don’t know how you get to 6 billion infections from there.

Tinker

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The Spanish flu of 1918 killed 50 million people. Most not on the United States, but still was material. The death rate based upon the population of the world was .00125 percent.

The world population at the time was about 1.8 billion.
The Spanish Flu killed about 2.8% of the world population.

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These “statistics” are so out-of-context as to be ridiculous! Check the dates of the Spanish Flu - 1918-1920. What else happened in 1918, anything of significance? The Great War ended but not its consequences. Now compare the state of the world economy and science to what it was a century ago. It would be best if people just took care of themselves, stay away from crowds and wash your hands often.

Suggested Entry Points? Buy whatever benefits from the panic. ZM, TDOC, there must be others.

Denny Schlesinger

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That is awesome. I hope everyone, including myself and my mother and mother-in-law and my sister, a breast cancer survivor can do as well.

Qazulight

Tinker,

This is not the Spanish Flue and this is not early 20th century.

We have the data from Hubei. It was a case where things got out of hand.

0.11 percent of the population was confirmed infected before the inflection point of the S curve. Most of the people who died were over the age of 60 and most of them were between 70 and 99.

That defines the demographic of this board.

In Hubei province the mortality rate was about 6 percent. If you assume that this is due to under reporting, then the true number of infected was closer to 1 percent and the mortality rate was 0.6 percent.

These numbers are rough, the data has lots of holes in it. But the best we can tell by going through it all is that for the 70-90 age group the mortality rate will be about 20 percent. 1 in 5 that are infected will die due to this virus.

Hubei was able to bend the curve because they were able to reduce exposure and the probability of infection. This bent the S curve early, keeping the population infection percentage in the 0.1 to 1 percent range. If we can do this in the west, we can drop the probability of death from this infection for the high risk group to between 1/500 to 1/5000. As there are probably 500 or more people reading this board. We will likely lose one of them this year.

If we do not bend the S curve, we can expect about 70 percent of the population to be infected. After observing the actions that societies have taken in response to this virus, I believe that the chances of that happening are approaching zero.

No matter the society, no matter the type of government, no matter rich or poor, all of the societies have responded in a similar manner at about the same time on the S curve.

I have started the clock at 400 cases. This is because that was the number that started people counting in Hubei province and Hubei was the first clock started. I started the clock in the USA on Sunday as that was when the number of cases topped 400.

However, I have been rethinking this for a few of reasons.

  1. There are only 60 million people in Hubei province and

  2. The United States is not a tight society.

  3. The administration of the population is reserved to the States. So we might need a more complex start as some states like North Dakota may never see 400 cases. They already practice social distancing.

We will see. There will be a lot more fear.

In the mean time. All of the Saul stocks are sitting on piles of cash, and can pull back expansion and save even more cash. If the individual investor can stand the pain of the red in his port he will probably be fine.

I personally couldn’t take it anymore and rebalanced and will have a hard time catching the updraft when it comes. That will probably be about the time the inflection point in the S curve is reached.

This is happening fast. It could be really bad, emotionally, in 7 days and be yesterday’s news by tax day. The knock on repercussions in the economy may continue for a while.

Cheers
Qazulight

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Here is a 1h presentation from a Stanford clinician with lots of good facts the importance of social distancing among other things. Precaution not panic is the solution.
I did put about 7% cash to work earlier this week. As of now I am fully invested and plan to stay that way.

https://zoom.us/rec/play/u8IsJOz8qm03HtScswSDC6UtW9W4Lfms1iQ…

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