Hi Saul,
I believe you may have the historical data to answer a question that has been swirling round my head for some time. If you had only ever invested in your highest conviction stocks, your 6 star stocks, what would your investment returns be over an extend period of time ?
I appreciate this would take some significant effort on your part but I would love to know the answer, as if it clearly makes sense to have 5-10 stocks instead of 50-100 then what about having only 1-3 stocks in your portfolio. I am not sure the risks would increase as the 6 star stocks are 6 stars for a reason.
Maybe too much work to investigate and if so no problem at all.
Thanks, John
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If you had only ever invested in your highest conviction stocks, your 6 star stocks, what would your investment returns be over an extend period of time ?
… if it clearly makes sense to have 5-10 stocks instead of 50-100 then what about having only 1-3 stocks in your portfolio.
John, it just doesn’t work that way. Each of my current favorite stocks didn’t start off that way (except maybe Datadog, which I built up fast, but probably hasn’t actually done as well price-wise as some others). They start off as small positions and I have to get to know them for a while and build them up gradually as more data comes in.
As far as having just one or two stocks, no way! When you’ve had stocks you’ve had confidence in, like Zscaler for instance, crater suddenly, no way I would put that much into one or two stocks. Not only don’t I have the courage, but I think it’s a bad idea! And Zoom, which is now my largest position by a good bit, started small, and if I was limiting to four or five companies, I might never have started it.
Best,
Saul
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Thanks for the explanation Saul.
Take care, John
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Guess I can contribute a bit in this topic. I am a research scientist in a top University with more than 30,000 employees. We have numerous tele-conferences intramurally and intermurally every single day. The way it works is that the university has a central web portal to initiate/host a meeting. Everyone involved only needs to download Zoom and clicks on the link provided in email from host to join. So the ORGANIZATION is paying not the individual! I can imagine, as it rolls out, every schools, organizations and groups will eventually be paying Zoom to allow their members to host a longer meeting if they take it seriously or use it daily.
I don’t think the technical barrier for tele-conference is particularly high to create a moat for Zoom (Am I wrong about this?). But this thing do have something similar to ripple effect. When your organization signed up for Zoom, you will use Zoom. When your industrial partners use Zoom, you have to use Zoom for a meeting. When “Zoom meeting” is a phrase and/or zoom itself is a verb, it is difficult to stop the trend. Now we host a >40 ppl lab meeting every week, it just goes smoothly. Our industrial partner do offer options between Zoom and Teams, but everyone goes to Zoom without thinking… Once again the big medical device company is paying for it, and they will likely switch to Zoom entirely in the near future.
The free offer from Zoom to host 40 min teaching is a very smart move to increase user pool. Not just the subscriber (organization) will influence the users’ choice. When there are enough number of users have preference, the decision-maker will take that into consideration. If you are a high school principal how will you choose the software of e-learning in the long run? If you have a 9 yr old using it everyday how will you choose when your company needs to subscribe for one? I think the TAM just expanded significantly and is difficult to estimate as this virus starts to reshape our daily life.
For the record, I have long position in AYX, Zoom, DDOG, CRWG, DOCU, and Team.
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oops, replied to wrong thread. sorry about that.