If it were easy, it would be too easy. I like to think Yogi Berra might have said that. But you’re right. You’re homing in on the crux of what we do here: try to discern if a company has truly durable growth, looking into the future – not just next quarter, but the long term as well. Following the numbers doesn’t only mean thinking about the short term. It’s not that easy. That’s why I’m emphasizing growth durability lately. Sometimes as you say, we have to look through negative macro. And to some extent, it takes time – time following a company for many quarters like we have with Datadog and Snowflake and others.
Durability, you nailed it. But how to detect it? It’s more than just the numbers. It’s the story around the numbers we’re seeing: the story about why we’re seeing them. We are constantly updating our thinking…and we will be wrong sometimes, because as you say, this is difficult. Which is why the discussions here are so valuable.
Honestly, I don’t think we press on with durability disagreements enough! I sold the last of my SentinelOne last week because of durability concerns. I sold most of my Crowdstrike in December for the same reasons. If I owned more than a small tryout position in anything we disagree on here, like Monday, Global-E, Transmedics, Gitlab, Clearfield, etc, I would continue to ask questions to try to sick the dogs of the board’s brain trust onto these companies to explore the investing thesis together. (Kudos to AnalogKid for continuing to try to do this with Transmedics…don’t quit!)
I will continue to think for myself of course, but I value the opinions of others here too. Especially on the crucial point of durability. That’s what we’re here for, right? Because someone else will see something I don’t yet.
Bear