Esteemed Members of the Saul Board,
Recently I asked Saul if he feared Sentinel One coming after CrowdStrike. He said no, and put his trust in the numbers CrowdStrike is delivering. CRWD has moved up recently from the low 180s to 230. Sentinel One released numbers as they prepare to go public. The numbers are far worse than CrowdStrike’s.
Someone pointed out all the risks Upstart lists, some that sound very scary. Upstart has gone from the low 80’s to the 170’s before falling back to the 120’s, still a solid gain in a short amount of time.
Someone watched a presentation on Snowflake and came away fearing their projections for 2029. Saul watched the same presentation and came away marveling at their performance. Snow is obviously down from it’s all-time high in the 400’s, but in the last three months its gone from the 180’s to 240s.
These two things are critical to thriving here:
We invest in what IS, not what could be - good or bad.
We respect what could negatively impact our stocks, and don’t whistle past graveyards. But we deal with the fear when it becomes reality. We seriously consider what catalysts might drive a stock price higher but that is secondary to what is: performance, execution.
It’s critical to realize that human beings are hardwired to overrate threats. Not dying is very helpful. But we’re not built for a world of 24/7 news broadcasting fears. So, controlling our fears here, where there’s serious volatility, is essential. There is always - always, always - reason to fear what might happen to a stock.
On a personal note, my beloved Grandma Sophie lived with great anxiety that a big dept store would run her husband Sam’s little pharmacy out of business. It never happened. Think of how much joy and quality of life was damaged, for no reason, by fears. Her fears on this were ever-present and since the ol’ gal could talk (have mercy) were expressed more often than the sun shines in Phoenix.
I spent 11 years in LA, where masses of people are ruled by dreams of glory that a) never comes and b) when it does often fails to make up for the lean years. I know many people in their 50’s who are now in serious trouble due to basing their financial future on what could happen.
So, whether the imagined future is good or bad, the key point is it does not exist. To live, or invest, as if it does is questionable at best. Consider Fastly. While most of us owned it, it tanked from the 120’s to the 80’s after a calamitous ER. Most of us raced out like George Costanza at a kids birthday party on fire. When the bad thing happened, we got out and most of us still made money.
Will Stitch Fix reinvent retail clothing? Will Teladoc reinvent healthcare? And both reap big gains? Maybe. But it no longer makes sense to me to invest in what could be. And though TDOC, like SNOW, has come back off recent lows, the fact is our board washed its hands of it about a year ago and it is DOWN for the last twelve months while our stocks have soared.
Lastly, I have contributed oongatz to this board lately, and to make that right, am now hard at work on a big report on what may be my favorite company in our universe. The leaders understand this post better than any we own as the leaders focus relentlessly on giving customers what they actually ask for, and more importantly what they’re actually buying.
This stock has risen and fallen in popularity here several times. But from my neck of the woods it has the strongest CEO, best culture, strongest narrative and therefore is most likely to maintain its current growth. None of our companies is more battle tested. And, at the risk of blowing up my own post with hypocrisy/contradiction, I think it is most likely to surprise to the upside going forward. In fact, based on how strong I feel the actual company is, if I could only own one of our stocks it would be this one.