I bought NFLX in 2004, went through the Quickster disaster of, what, 2010? But held on and still hold the shares today.
I am the fortunate holder of a 150 bagger.
I’m amazing, right? Not really. The only reason I have come out on top on this position is because at the time I was (and still am) a follower and great admirer of Tom Engle, TMF1000. Tom has a philosophy of keeping two portfolios: a “never touch” portfolio of companies to be held through thick and thin, and a trading portfolio where he satisfies his (tremendously patient) trigger finger to trade, and with which to jump on market swings that he recognizes through constant study of his stocks’ PE ranges and various other indicators.
As most of you know, TMF1000 is a wildly successful investor and incredibly generous contributor to the boards–and now that I think about it, how lucky are we? To have someone like him and also someone like the great Saul (and all the other greats here) to also be amazingly generous with us?
Before I go any farther, thank you Saul, Tinker, Duma, Bear, GauchoChris, Dreamer, Niki, and all the rest for your amazingly helpful contributions!
But back to our story:
Back when the Quickster thing happened, I watched NFLX tank and tank and tank some more. Sadly for me, the darn thing was in my “never touch” portfolio. If it wasn’t for that, I would’ve sold absolutely–I mean: broken thesis, incompetent management, how much clearer could the sell signs be? BUT AGAIN: the never touch portfolio. I HAD to hold. That was my rule. The shares I had bought for 2.38 had run up to 42 and then had fallen all the way back down to 7. (Rolling eyes: THANKS TMF1000, great call! Sheesh!)
Well: the never touch portfolio stayed untouched. Two long years later NFLX was back to 42. And then: the rocket took off! Today, although the great bulk of my portfolio is in SaaS, I still hold all of those shares of NFLX. It is not a stock that will double any time soon, but I will freely admit that I have an emotional connection to these shares, as – can you believe it? – they are the first shares of any company I ever bought! I plan to hold forever, and then give them to my heirs, showing them: look! Look how smart grandpa was wayyyy back in 2004! Now go enjoy your free college education!
So how does this relate to NTNX, which, by the way, I bought, still hold, and like Tinker, plan to hold until the dust settles at least for a little while so that all the disgust can get digested? Well, I was disgusted with NFLX back then, just as I am with NTNX today. Management seems to have totally screwed this one up, making dumb moves that I just don’t understand (I’m talking about both). But back then with NFLX, I did see this new streaming idea and this new “House of Cards” idea and felt, mayyybe there’s a little something there.
And with NTNX, I do see that it’s not the obsolescence of the product, it’s (apparently) the marketing.
I think: mayyyybe there’s something that can be fixed.
I will end with this: I understand Saul’s strategy of holding until it’s time to not hold and then moving on unemotionally. It’s smart, it’s sound, and it’s difficult to pull off as he has so successfully. It just. Makes. Sense.
However, I also hold an emotional bond to NFLX and plan never to sell my shares. I root for NFLX like I root for my favorite sports teams, remembering the days when they made amazing runs, acquired the best players, seemed the smartest guys around.
It’s just fun.
And investing should be–first, it should be about making money. But I think we are all kidding ourselves if we don’t think in some part of our mind that it’s fun.
It’s fun to find a story in the numbers.
It’s fun to latch on in the early innings.
It’s fun to WIN.
And sometimes you win by picking the winning team out of the gate (TWLO and SHOP are my faves) and sometimes you win by sticking to your guns.
So which will NTNX be? I still have some TMF1000 in me (although I’m much more Saul-esqe these days). I can be patient. If I sold NTNX, I wouldn’t have anywhere to place the money at this time. And also:
I think: mayyyybe this can be rectified. I have learned to be patient.
Deepest thanks, appreciation, and best of luck to us all!