If you still have any doubt that this is the place to be:
As of Monday our “over-priced” SaaS stocks were 20% to 25% ahead of the indexes.
Yesterday the markets were up 4% or so and my portfolio of SaaS stocks was up 11.8%.
Today, the markets are down 3.8% to 6.9% as I speak, and my portfolio of ridiculously overvalued SaaS stocks is up 3.01%.
Where are those trolls who told us our stocks would fall multiples of the market fall in a down market?
Saul
Saul
Don’t be surprised at all the off topic posts and one liner posts that you so detest after one of these posts.
Where are those trolls who told us our stocks would fall multiples of the market fall in a down market?
You know, you’ve been beating this drum for quite a while now. Are there some actual posts on this board where that occurred? I honestly don’t recall seeing them.
You know, you’ve been beating this drum for quite a while now. Are there some actual posts on this board where that occurred? I honestly don’t recall seeing them.
They’re there, but I would prefer Saul not waste his time finding them for you. If you care, look harder. If not, maybe contribute something on a company you like.
Bear
They’re there, but I would prefer Saul not waste his time finding them for you. If you care, look harder. If not, maybe contribute something on a company you like.
Bear
Typical.
Carver, a quick look back at your last dozen posts shows that they are almost all one-liners, mostly critical and mocking.
If you are not happy with the quality of our board, there are plenty of others. No one is making you stay here. If you don’t like it here, just leave.
Saul
Carver, a quick look back at your last dozen posts shows that they are almost all one-liners, mostly critical and mocking.
If you are not happy with the quality of our board, there are plenty of others. No one is making you stay here. If you don’t like it here, just leave.
It’s likely to be more than a dozen, isn’t it?
For someone who seems to regularly mock so-called trolls, that’s a bit ironic. Feel free to have me banned or disbarred or whatever it is you do here to folks who disagree - respectfully or not - with the tenor.
Here’s a press release from Coupa.
https://www.nasdaq.com/press-release/coupa-business-spend-in…
no position in Coupa at this time.
Saul,
I’ll take the bait and respond. With all due respect, I think you’re missing the proverbial forest for the trees.
If my account is DOWN 25% and yours is DOWN 35%, is either of us really “winning”? Plus, with this volatility, the names you point to as outperforming today could easily play catch-up in any given day and close the performance gap.
Either way, I don’t think the “trolls” (as you call them) have been as wrong as you seem to believe. There was in fact a bubble in the smaller-cap software/SaaS sector AS A WHOLE. If you pull in the performance data of the entire group of software/SaaS stocks (many of which you owned at one point or another but kicked them out), they have actually done far worse than your current portfolio. Your portfolio has selection bias i.e. it is not representative of the software/SaaS group as a whole because you have dropped those underperformers over time.
Concurrently with point #2 above, the fact that only 6 software/SaaS stocks make up virtually the entirety of your portfolio is a testament to the fact that you have recognized that many other software/SaaS names have fallen off the wagon and only a few are worth holding onto. At one point, you had almost double that number of software/SaaS holdings. Why is that? Well, you smartly dropped those for the very reason that their growth was slowing and/or they were not showing enough movement to profitability, and their stock price performance flagged as a result.
By the way, this is in no way meant to attack you. I am a fan of yours and give you major credit for being able to select and stick with the best of best from the software/SaaS sector. Doubtless, had you stayed invested in many of the same names you held in the past, your portfolio performance would not be nearly as good. However, the “trolls” were not entirely wrong to criticize the valuations of many in the software/SaaS group which have demonstrably proven to have been overpriced vs. their growth/profitability reality. ZS, TWLO, MDB, and PLAN just to name a few.
-Cap
If my account is DOWN 25% and yours is DOWN 35%, is either of us really “winning”?
Hi Cap, perhaps you didn’t understand what I was saying. We just got hit by the most enormous and unprecedented shock to the world economy that you can imagine. I was saying that the SaaS stocks would be a safe harbor in a storm, while others have said in the past that they were wildly overvalued and would therefore go down multiples of what the market goes down. They were telling us to sell the overvalued stocks and buy the stock index ETFs.
As of today those five indexes are down year-to-date an average of 32.5%. If you started with $100.00 you’d have $67.50 left.
As of today my portfolio is down year-to-date a total of 6.2%. If you started with $100.00 you’d have $93.80 left.
Hell Yes, in a global melt down like this, of course being down just 6% year-to-date is “winning”. Since 93.80 is 139% of 67.50, money put into my portfolio would be worth 39% more than the same money put into the indexes. I was pointing out that those who said our “overvalued” stocks would go down way more than the markets were wrong, and certainly buying market ETF’s would have been a disaster.
…many in the software/SaaS group which have demonstrably proven to have been overpriced vs. their growth/profitability reality. ZS, TWLO, MDB, and PLAN just to name a few.
And I was in all of those at one time or another, and in spite of that my results are greatly killing the averages. I exited when the story changed. That’s what investing is all about.
Best,
Saul
Saul,
What I have found is one’s 2020 performance depends a lot on how much ZM one had at the start of this year! For example if you compare 2 identical portfolios except that in one case you replace Roku with ZM (assume you had 15% position at the start of the year in each ports) that itself should contribute to 20% improvement in perf. in the port with ZM! So, instead of being 20% down for the year for the Roku port the ZM port would be break even! One can replace Roku with other companies like AYX, CRWD - you will still get a delta though not as different as the case with Roku.
But to your larger point, yes most of the SaaS ports have out performed the index in 2020. But they are well below their July 25 peak and most are probably under performing the index since then. I attribute this to a SaaS bubble back in summer 2019 which has clearly been reset by the beginning of this year.
With regards to ZM, I really do not know what people are expecting in growth. 5 of the SaaS companies that I follow have a combined average P/S of 12.7 and a projected 1 year growth of 44%. ZM has a P/S of 52.7!