I was wondering how people around here play SHOP pull back? given the valuation, we all knew that will happens somewhat imminently and it is now.
Technically, does anyone see a local bottom in the next few days or weeks?
For the ones who have a large position 15 to >20%, how do you deal with those pull backs? I guess this question apply not only to SHOP. What kind of volatility are you comfortable with?
tj
Shop is dropping now partly because of a downgrade from Goldman Sachs. As of the end of March, they owned a little over 157,000 shares. I can vouch from their shenanigans in the past that within a week, their share count will have most likely have tripled. The same thing happened with AMD and countless other companies.
One important thing is that SHOP will be added to the S&P/TSX Composite Index aftermarket on June 16th. Goldman Sachs is using its analyst downgrade to load up on more shares prior to this event which will have a noticeable impact on the stock price. The use of analysts like this by major financial institutions needs to stop, it is starting to get ridiculous. If GS was short Shopify and they downgraded it and had their money where their mouth was, fine. Same thing if they upgraded it and were long on the stock. Ideally analysts and the organization they represented wouldn’t have any position in the stocks they cover. The problem is when GS, and to a lesser extent JP Morgan Chase and others, downgrade a stock so they can buy it cheaper, and continue upgrading a stock that’s way overvalued as they’re dumping all of their shares. It really goes too far.
I would predict that if we aren’t at the bottom right now, we’ll definitely be at the bottom prior to the addition to that index and it will go up from there. There is some pretty heavy manipulation right now on this stock, which is understandable given its fast rise. Large pullbacks aren’t easy, but that is the risk of any rapidly growing stock though, it’s going to happen.
I got shaken out of both SHOP and NVDA yesterday, along with some other tech high-flyers. Sector rotation certainly seems to be occurring, but I also was concerned about SHOP’s story.
SHOP will do well if on-line merchants employ its software to run PROFITABLE operations. While we know that SHOP gains many new customers, do we really know how well their customers are doing in terms of creating sustainable, profitable businesses? Or is SHOP simply creating the type of “Mom and Pop” small storefront operations on-line that AMZN will crush just as WMT crushed their brick and mortar equivalents 50 years ago?
So far the 50dma in SHOP has held the last 2 days (83.45). Personally I bought the last dip in the 81s and would buy any dips below that. I know that 75% revenue growth is not sustainable but believe they will continue to out perform the market for the foreseeable future. It’s my belief given the US being so over stored “bricks and mortar”; start up companies will go right to the web first.
Rob
“The problem is when GS, and to a lesser extent JP Morgan Chase and others, downgrade a stock so they can buy it cheaper, and continue upgrading a stock that’s way overvalued as they’re dumping all of their shares. It really goes too far.”
not that GS is the helper of the little investor by any stretch of the imagination but why not have them and their followers load up more at a bit lower prices? that build support and help to propel it further up in future. Of course this would only make sense if the business continue to grow and perform. That’s the power of big money. The flip side is they can also do the reverse if they think the business is not going to grow like it has.
But the lucky and the clever investors have bought SHOP at much lower price before the big money came in, and hopefully they will continue to enjoy it go up as the business unfolds for years.
Haven’t they created an opportunity to add or to get in? maybe a few years later they will also be part of the clever and lucky ones.
tj
https://finance.yahoo.com/news/dow-jumps-new-high-tech-recov…
new high in DJI
new highs are not the stuff of bear markets
SHOP was down today but all my other techs were up, some like TSLA and CRTO quite nicely. Smart money anticipated SHOP being added to SP500, then sold, driving price down. They bought slow and sold fast.
The use of analysts like this by major financial institutions needs to stop, it is starting to get ridiculous.
Welfard -I couldn’t agree more. They represent themselves more than their customers. If its this obvious to us, it must be obvious to the ‘regulators’. The only reason it isn’t illegal is because big money has big power.
I understand why they don’t rate themselives on the accuracy of their own ratings, but don’t know why a watchdog group doesn’t simply keep track and publish how the stocks do after each broker changes their rating.
<<<The use of analysts like this by major financial institutions needs to stop, it is starting to get ridiculous.>>>
Why? If you are sophisticated to read through the lines, then you are sophisticated enough to take advantage of what happens to stocks after you read through the lines.
Playing for 5-10% and buying in, good luck with that. But real fear, uncertainty, and doubt, when you know that most of the media is full of it, gives you an advantage to dig for the real truth of the matter and invest accordingly, against the grain of thought.
Funny, when the $300 call on NVDA was made, I posted on NPI that the “tenor” had changed and that we were not at a top, but we were getting closer. When the press gets that positive, starts manufacturing reasons for a higher and higher price target, and then goes batty in regard, you know we are reaching a top. But a top always goes above and beyond a top. So I expect things to continue to go swell for awhile, but with more downward shakes from time to time as volatility is the cost when we head into such periods of time. So don’t worry, be happy.
On the other hand, such periods of volatility are par for the course. Nothing new here. If you are invested for the long term, don’t fret them.
And in the end 5-10% is nothing in the life of a stock. If you investment style is to fret over such things, or to make money off of such moves, then it is an alien method to me (not that it may not be an effective one).
I am not for criminalizing information, as long as we have enough of it that we can decide for ourselves, and understand the basis and purpose of where the information is coming from.
As we discussed with autonomous vehicles. We were discussing a report. A report that had some major claims on some dubious projections. A report that came out on the heels of Waymo getting a $70 billion appraisal by Morgan, and Uber needed a huge valuation for its current investors to make a profit, and for Uber to raise more capital as it hits a period of bad press.
Was this report put out for such nefarious purposes? Probably. yet within it were interesting things nonetheless. Take it for what it is. Look at the totality of information, and understand how the media works.
Tinker
Why? If you are sophisticated to read through the lines, then you are sophisticated enough to take advantage of what happens to stocks after you read through the lines.
It’s high time for investors to take responsibility for their trades and not blame analysts and other pundits when we know full well that their interest and ours don’t converge.
A two day tech correction set this board on fire. Come on, it’s par for the course.
Denny Schlesinger
“I understand why they don’t rate themselives on the accuracy of their own ratings, but don’t know why a watchdog group doesn’t simply keep track and publish how the stocks do after each broker changes their rating.”
Not exactly a watchdog group, but analysts are tracked and rated by Starmine and others.
https://www.forbes.com/2006/11/21/starmine-earnings-estimate…
Rob
I was wondering how people around here play SHOP pull back?
What, did it pull back?
Seriously, I don’t mean to sound like a Fool commercial, but it’s a lot easier if you think longer term, and that’s coming from someone who has been hammered pretty good recently. My question is not what SHOP price will do next week or next month, but where will it be in 5 years? How about 10 years? You either believe in the company or you don’t. It will go down. I guarantee it. And it will go up, I guarantee it. Sure, you can play with the stock for short-term gains, and that’s fine - if you keep on top of every single holding every single day. I’m not knocking that play either, I’ve done it myself. But that’s not really investing, is it?
given the valuation, we all knew that will happens somewhat imminently and it is now.
Call me the fool; I don’t know that. But I thought I did with NFLX. So I sold. Not once, not twice, but 3 times. I thought I knew with NVDA. So I sold. Twice. And so on and so on. And now SHOP? Sorry, no shares for sale here.
Give me a 10% discount, and I’ll take all your shares. Oh, wait. Oops, I’ll have to give my banker a call. I’m all in. OK, he said no problem, so I’ll take 1,000 shares at $82, and my banker would like 5,000 shares at the same price. That’s a bargain since after all, we KNOW it’s headed for the gutter. Well, at least that’s what I heard.
NOW it’s time to review you plan and maybe decide what you believe. 
Good luck.
Dan
I was wondering how people around here play SHOP pull back?
What, did it pull back? (SHOP is down to a 10% position for me now.)
Seriously, I don’t mean to sound like a Fool commercial, but it’s a lot easier if you think longer term, and that’s coming from someone who has been hammered pretty good recently. My question is not what SHOP price will do next week or next month, but where will it be in 5 years? How about 10 years? You either believe in the company or you think it’s all about hype (and you wouldn’t be alone there.) It will go down. I guarantee it. When, I don’t have any idea. And it will go up, I guarantee it. Sure, we can play with the stock for short-term gains, and that’s fine - if we keep on top of every single holding every single day. I’m not knocking that play either, I’ve done it myself many times. But that’s not really investing, is it?
given the valuation, we all knew that will happens somewhat imminently and it is now.
Call me the fool; I don’t know that. But I thought I did with NFLX. So I sold. Not once, not twice, but 3 times. I thought I knew with NVDA. So I sold. Twice. And so on and so on. And now SHOP? Sorry, no shares for sale here.
Give me a 10% discount, and I’ll take all your shares. Oh, wait. Oops, I’ll have to give my banker a call. I’m all in. OK, he said no problem, so I’ll take 1,000 shares at $82, and my banker would like 5,000 shares at the same price. That’s a bargain since after all, we KNOW it’s headed for the gutter. Well, at least that’s what I heard.
NOW it’s time to review your plan and maybe decide what you believe. Good luck.
Dan
Believe me I get what you are saying. I would have answered the same to someone who had that same question. Why don’t I answer my own question?
Because there are other answers that could be psychologically satisfying. I just like to hear them- the other answers. Which answers are best? Certainly no one will know where the path of this stock will lead to in 5 or 10 years. But you believe. I think this is not unreasonable at all. The great quarter report and the outlook was just announced a few weeks back. What has changed, right? nothing that we know of.
tj
Hi justicier,
Didn’t mean to suggest that my way is the only, or best, way.
No, my thinking goes more like this: There are companies just now starting to coalesce into real future earning machines. The Googles of tomorrow, if you will. They’re public, they’re right in front of us, and they’re for sale. Maybe they’re bargains, maybe they appear to be super expensive. But if we knew they would grow like some undoubtedly will, they’re never too expensive and I want to own them. But we don’t know which ones are real and which are pretenders. At least, I don’t. Rather than trade in and out of a bunch of maybes, a few probablies and several mightbe’s, I’m convinced I’d be best off finding a handful of the real thing, the real future earners and then hold on with both fists for the long haul with 8-10% of my investment capital in each, and still look for more with the rest. If I can do that just a handful of times over the coming years - 8-12 times, maybe? I’d be one happy investor. Strike that. I’d be one happy owner, with all the attendant rights, privileges, profits and satisfactions of the founder.
It’s been my experience (maybe unique?) that the level of conviction required to truly believe in especially a young, disruptive company to the point of being convinced this is one of those, a real future earning machines, isn’t something that comes along every day. Maybe I’m too skeptical. Maybe I’m more risk averse than I used to be. Maybe I’m becoming senile.
But for all it’s hype, for all its detractors, for all its huge gains in sales, customers, publicity, and income . . . aside from all of that, SHOP is, for me, one of those companies. I don’t encourage others to buy it, I don’t encourage them not to. I don’t care what they do with SHOP shares, if anything. It’s my goal to hold on to just a few winners. If that sounds like a TMF ad, so be it. But there’s a big difference. No matter how successful my investing might be or might become, I will never own 100 investments again. I have no desire to guess, to throw darts, to own dozens of companies. And I especially don’t want average or near-average investments! My investing career has led me to own (and sell) well over 1,000 different equities over the years. It’s too much work. My returns over the S&P 500 aren’t enough to make it worth it.
I now own only 14 companies. All but one are capable of earning the high level of conviction I require to make it a “permanent” holding. (Apple is the exception if anyone cares, but that’s a conversation best held elsewhere and I won’t change my mind anyway.) But it will take a while for others to earn that conviction, if they ever do. GOOG is the only company to so far earn the Raptor Conviction Award. Even lowly old-school CSX has performed almost flawlessly since I’ve been an owner and CSX is maybe a year or two away from permanent status. They’re 2 I can’t imagine selling, but I always maintain the right to do so. The rest are high flyers, newer disruptive companies, and in the race to earn my conviction, SHOP is leading the way.
Dan