Not sure if this is the right location for these questions, but here goes. I’ve gone through those earlier Knowledgebase posts, and I’m concerned about the current concentration of stocks and your original investment theses. It seems like most of your current investments are in SaaS stocks that have mostly negative net income, extremely high gross revenue, and strong momentum. In prior years you were concerned to some degree with PE, which seems to have shifted to PS, with more emphasis on S, rather than E. The relative strength in these industries and shares is admittedly astounding.
However, what happens if and when that slows, and something else replaces it?
Will the desired returns hold up with such a heavy concentration (different businesses, but similar cloud based software, etc)?
Will it be possible to see that transition coming and shift out of this category of businesses?
Just as a caveat, I’ve tiptoed into a few of your stock holdings already (Newhr,ZS and SQ). Quite impressed so far with their resiliency during this downturn. Thinking of allocating more, but I’m concerned with what appears to be a momentum based method. I got burned in the late 90’s by a small momentum (admitted a purely quantitative strategy) that virtually annihilated my investment by the early 2000’s. The only holding that barely held up was RIMM, which eventually rocketed, and I luckily concerted half to Apple in 2007 and more than made up for the losses.