As you know, at the end of 2021, a week and a half ago, Crowdstrike was down to my smallest position at 4.0% of my portfolio.
Over this last weekend, I had occasion to ask myself “If I wasn’t in Crowdstrike and someone came along and proposed this company to me out of the blue, would I start a position in it?”
Let’s see, revenue growth of 63%, down from 87% yoy, and down from 70% sequentially, falling off a cliff, in spite of all the tailwinds in the world, with even its advocates predicting mid-50%s for the coming year. And this while other security companies are accelerating, like Zscaler, SentinelOne, Palo Alto, and even Cloudflare (a little). Would I pick this as one of my top conviction nine or so companies? I mean, we have a competitor, SentinelOne growing at 127%! So my answer would be “No way!”
So I had to ask myself, "So why am I staying in it, even as my smallest position?" and decided it was sort of sentimentality, combined with hope for a turnaround, neither of which is a good reason for holding on.
So I sold out yesterday and put the money in ZoomInfo, Zscaler, Snowflake, SentinelOne, and Amplitude (they are listed in on particular order), and just a touch in Monday as it was already a 17% position.