on a run. Up from 32.50 to 44.35 in just the last month. Showing that being a bit late to buy can still be a winner. Up over 200% since January
I think Square Capital is highly disruptive to the banks. The loans are by invitation, not request as is traditional. And their computer works faster and more reliably than human bankers. Credit card companies could give up the “float” they get by delaying payment, banks could streamline. But they won’t unless Square gets a lot bigger. Like Tesla is to ICE car makers, Square is a pinprick now ,not a serious wound.
I added to my position a few days ago. But at today’s price SQ can not afford even a slight stumble. However the TAM is far from saturated so long term there is still upside, and this is one I would be willing to hold through a bear market and recession.
Seeing the price up a bit more this morning, I was considering throwing up a post here to thank those who have been following Square closely on this board. I have only been in since August, but my shares are already up 60%…wait make that over 62%.
The small business lending market in the United States, as of 2013 anyway, consisted of about $1 trillion worth of loaned money. That figure is likely to have grown in the meantime, with companies like LendingClub Corp (NYSE:LC) and SoFi meeting a need for capital that simply hadn’t been met by any bank, large or small, prior to their rise. Even a small fraction of that market would prove to be a boon for Square, and with its two million(+) payment customers in tow, it’s well positioned to capture a healthy piece of the small business lending market.
The irony is, the customers Square would be making loans to are largely the same customers banks, large and small, rejected in the past, calling them too much of a credit risk and/or not asking for enough money to make the loan worth the bank’s while. Big mistake.
It’s up the last few days because of their announcement that they’re making it so you can buy bitcoin through sq – MusiCali
SQ makes a tiny profit on every transaction.
Do you really think that there will be such a rush to using Square to buy bitcoins (in lieu of some other approach) that it’ll make a short or long term difference in the company’s overall performance?
For myself, the answer is clearly: “no”.
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
No idea about the financials of it but I do believe it is the hype of it that is driven the share price these last few days. Of course this is all speculation
This new crypto currency bubble is like the Internet bubble of the 90s.
Because people are going to be bidding up any stock that has anything to do with crypto it will eventually affect our investment thesis in these companies because it’s possible that our investment will be bid up into a bubble like stratosphere.
Final trade on fast money they said this big coin thing could rival the amount of money that coin base is taking in from transactions and from experience of buying crypto on Coinbase they get a lot of money on those transactions.
I’m along square and stay long probably as long as Saul still likes it.
Thanks everybody!
I’ve made no significant trades in the last several months. Square has organically grown into my largest position, a scary big 20% of my holdings, knocking Shopify into second place, also a very large 18%.
I’m rather in a quandary, a rebalance will force me into taking capital gains. I’d rather not finance more government folly at this time, but it is inevitable, I’ll probably postpone until after the New Year. Separately, my portfolio is very concentrated, I have only 8 significant positions, but I’m up over 87% for the year. Something about watering the flowers and plucking the weeds.
Square is difficult to get a handle on because they keep expanding the business model. There’s no way to even guesstimate the TAM because who knows what new line of business they may enter next. And make no mistake, the loan operation is a new line of business. Of course, it’s integrated with the POS/transaction fee business, but it’s essentially a new, related business.
Congrats Brittlerock!
I’m new to SQ
Just bought around 37 a week or two ago.
I am excited too that they are expanding the business model.
The loan business they’re getting into seems pretty amazing in that they have a lot of information about their customers’ revenue via AI.
Bert Hochfield goes into great detail in his article “how high can a square fly” on SeekingAlpha.com
He basically says He has no idea how big The TAM of square capital could be.
I don’t know how I feel about rebalancing my single stock holdings as they increase in value. My perspective is different though because 75% of my savings is in index funds anyways.
Never say never but I don’t think I’m going to sell my single stock holdings or rebalance until I think the story has changed or the company has grown into a blue-chip.
I’m long
SHOP, SQ, ANET and TSLA
I’ve made no significant trades in the last several months. Square has organically grown into my largest position, a scary big 20% of my holdings, knocking Shopify into second place, also a very large 18%. I’m rather in a quandary, a rebalance will force me into taking capital gains. I’d rather not finance more government folly at this time, but it is inevitable, I’ll probably postpone until after the New Year. Separately, my portfolio is very concentrated, I have only 8 significant positions, but I’m up over 87% for the year. Something about watering the flowers and plucking the weeds.
I generally don’t sell stocks just because the price has gone up, unless the story has changed or the position size has gotten too large. With Square the story is only changing for the better, but for me 20% would probably be too large. (But I have 11 positions so an “average” position for me is 9%, while you have only 8 positions so an “average” position for you is 12.5%). Congratulations on your 87% year to date!
I’m long Square and (will) stay long probably as long as Saul still likes it.
Hi MusiCali,
That’s a terrible way to decide when to get out of a stock! You need to decide for yourself, not based on what I do. What if I decide to get out in the beginning of a month some day, and don’t announce it for four weeks? Or if I’m seriously ill and in the hospital and don’t announce it for three months and everything goes to h-ll? Or if I’m just plain wrong? Don’t do your investing just based on my decisions. I’ve been plenty wrong at times.
Thanks Saul.
I get it. Not “relying” on you per se.
But having gotten absolutely slammed in high p/e stocks like ssys and also stocks that weren’t cash flow positive. let’s just say I’ve learned s lot from you and I have made back a lot of $ since I’ve been following you.
I don’t feel that any of my long term holds are in need of immediate action regardless of changes you may make during the month.
That being said you are a much better stock picker than me.
I’ve been investing for 10 years with lots of mishaps along the way, including quite a scene with AAPL options in 2013.
It’s great having you around but I’m big enough to say that while I appreciate you and the board and your basically free lessons in investing, I release you from all responsibility for my investing decisions. As per your suggestion I will be sure to do my own DD with SQ.
TSLA I’m sure is not a board stock. ANET I believe will be as big as Cisco someday.
I bought SHOP initially at around $40 and ANET around $90.
Thanks for all of your help!
What if I decide to get out in the beginning of a month some day, and don’t announce it for four weeks? Or if I’m seriously ill and in the hospital and don’t announce it for three months and everything goes to h-ll? Or if I’m just plain wrong?
BC Tim,
You have got to study people’s activities and be accountable for yourself. As someone who helps others with their finances at church when they get in a pinch, I HATE to hear that people say that I will do whatever you say. What people are saying is that I am responsible to for their financial results, and they don’t want to take ownership. Because I care about them, it makes me stressed and not want to help them (that may not make sense to some people, but that’s how I feel).
This board is about PARTNERSHIP. Look at Saul’s POV, benefit from Saul’s POV, then develop a POV and investing process of your own. Before looking at individual stocks, I would dial in how you plan to manage your portfolio. For example, I use the 1-2-3 method to invest in stocks: 1% for an initial position, 2% as the thesis gets further confirmed (usually by a quarterly report), and 3% when I get further confirmation. I am almost as concentrated in my holdings as Saul, but I am not comfortable buying or selling until I get hard numbers (that’s the chemical engineer in me speaking). I would also say that I tend to invest in a wider range of sectors in the market than Saul to reduce risk. I definitely buy and sell more slowly than Saul, but I gain most of what Saul does and loose less than Saul. I also buy and sell FAR more rapidly than TMF. I also sprinkle in a few option vitamin pills :o).
My point is to find a process that is right for you, and find some stocks that interest you to share as a partner on the board. Then the encouragement and critical thought can guide your investments in an even better way.
That type of activity helps us all. Care to develop a portfolio plan and a stock idea or two to join in the fun?