Thanks, group - & what CAGR tells me

Thanks, everyone, who contributes to this board. I understand that all my decisions are mine alone, but that I am also drafting off serious goodness. (At my work we sometimes call that Infinite Awesome!)

Anyway, looking at CAGR for my various stocks across all my ports, I immediately see I should consider increasing both my HUBS and SQ positions. (I discount poor performance of ANET, as it is a new position for me, so the CAGR is somewhat meaningless yet.) I bought a trading position in both UBNT & SHOP after the Left attacks (so far those haven’t done that well). Otherwise UBNT would be less than my 4th position. Regardless, looking at these numbers, it’s clear to me that UBNT doesn’t deserve to be as high as it is. I’m actually wondering now why I have it at all, relative to all these others high performers. I’m starting to wonder the same about TLND.


Ticker	size rank	CG-min	__*CG-avg*__	CG-max
ANET	10		-98%	__*-12%*__	74%
HUBS	7		351%	__*353%*__	354%
LGIH	5		94%	__*143%*__	174%
NTNX	6		-100%	__*380%*__	1083%
NVDA	9		45%	__*170%*__	258%
*__*SHOP	1*__		-99%	__*86%*__	183%
*__*SQ	3*__		280%	__*1307%*__	4271%
TLND	8		26%	__*44%*__	82%
*__*TTD	2*__		159%	__*412%*__	1179%
*__*UBNT	4*__		15%	__*22%*__	56%

-FrickNFool

4 Likes

Regardless, looking at these numbers, it’s clear to me that UBNT doesn’t deserve to be as high as it is. I’m actually wondering now why I have it at all

Hi FrickNFool,
You might take into consideration that UBNT currently has a PE of 17 or 18, while Square’s is about 170, with all the earnings in the future. Also, UBNT has two businesses, the cash cow which isn’t growing much, and the enterprise part which is growing very fast, and is now more than 50%, and soon to be a bunch more than 50% as it outgrows the cash cow part.

I certainly wouldn’t put any faith in those 4000% CAGR’s you get (for example, with Square), by working from a tiny base. I seems pretty meaningless.

Saul

15 Likes

What kind of time period are these CAGRs. Clearly, not just ANET, but UBNT and SHOP, if purchased after the short attack, have not been held long enough for this to be a meaningful number.

Short term CAGR is pretty much meaningless, specially with volatile stocks. I would think you should not rely on it with less than one year’s price data. I rely on 15 to 20 years but those are usually not Saul type stocks.

Denny Schlesinger

2 Likes

One way to avoid the vagaries of your entry points is to use a charting tool to compare the stocks. It’s useful to look at a number of time frames, 5 years, 10 years, etc. I use

http://bigcharts.marketwatch.com/

Denny Schlesinger

For clarity, here’s a couple more columns of data, as well as another table showing each stock’s CAGR over the past year. I believe the 1-year and 6-month CAGR values are extremely useful, and the 3-month less so, but still useful (taken as part of the whole story).

I understand this is stepping into “market timing” territory, but I finally exited BOFI recently, getting tired of the opportunity cost while so many other stocks are rising significantly.


Ticker	rank	CG-min	CG-avg	CG-max	#Purch	MinHold	Avg	Max
ANET	10	-98%	-12%	  74%	 2	 1	 13	 24
HUBS	7	351%	 353%	 354%	 2	43	 43	 43
LGIH	5	 94%	 143%	 174%	10	64	188	294
NTNX	6	-100%	 380%	1083%	 6	 1	 14	 24
NVDA	9	 45%	 170%	 258%	 2	24	 43	 62
SHOP	1	-99%	  86%	 183%	20	17	216	409
SQ	3	280%	1307%	4271%	 7	17	 41	 69
TLND	8	 26%	  44%	  82%	 5	45	 71	 80
TTD	2	159%	 412%	1179%	14	17	 49	 76
UBNT	4	 15%	  22%	  56%	10	27	187	233

And each stock’s performance.


Ticker	3mCAGR	6mo	1yr
ANET	134%	105%	133%
HUBS	102%	 89%	 56%
LGIH	165%	207%	 65%
NTNX	 87%	123%	-21%
NVDA	 81%	264%	188%
SHOP	  9%	 72%	123%
SQ	144%	263%	191%
TLND	 25%	 93%	 83%
TTD	172%	216%	143%
UBNT	 53%	 36%	 13%

Frick

Frick, I don’t want to be critical of you and the work that you have done, but I do want to be critical of the figures. I don’t think this kind of comparison means a thing or tells you anything. These are such totally different companies, each with its own different characteristics and stories, that trying to compare them according to any set of figures at all is meaningless. They are as varied as LGIH, a homebuilder, growing like mad, with a low PE, but in a cyclical industry, Nvidia, the leader in Artificial Intelligence, Shopify, a SaaS software company, with almost all recurring revenue, but only just now about to break into the black, Ubiquiti and Arista, both of whom are using low pricing and well-designed products to steal market share from Cisco, but differing markedly in their business plan. Seriously, comparing stocks like that on CAGR is truly meaningless.

I think you’d do much better to learn as much as you can about each company, its products, its battle plan, its success or lack of, it’s TAM and runway, and its moat or lack of (among other things)…And then decide for each of them whether you want to be a stockholder or not, and quit trying to compare them on a particular number. I think it’s a waste of your time. It’s like trying to decide which fruit will taste good by comparing the diameters of a watermelon, a grape, an apple, a blueberry, and a cantaloupe. You are missing the essence of each fruit in trying to put it into a number, and missing the essence of each company, which differ from each other in essence even more than the watermelon and the blueberry.

Best,

Saul

30 Likes

I’d suggest that you at minimum hold onto Ubiquiti through their upcoming earnings announcement. Based on the complete flimsy-ness (sp?) of the Citron fraud claims, the remaining incredibly high short interest, the associated 19% borrowing rate to short shares now, and the much lower than average trading volume of yesterday and today (until a big block just before market close), I think a short squeeze is almost imminent (may not be triggered until the $0.85-0.95/share of quarterly earnings is announced in a few weeks).

1 Like

You have decide whether you want to be a trader or an investor. It’s virtually impossible to be both.

If you are (or want to be) an investor, spend more time learning about the companies, their products/services, markets, moat and most importantly, IMO, mangement.

You’ve held BOFI until recently!? Garrabrants is a lunatic and an idiot (again, IMO). I bailed long ago.

2 Likes