Maybe obvious but still important. Here’s our Golden Moment, the Ultimate SID board Buy Signal:
- One of our stocks crushes earnings.
- No one spots anything to worry about. At all.
- The stock drops 10% or even 20% for no business-specific reason.
We had a Golden Moment with Upstart and caught an 80-170 rocket before falling back to 115. They spanked earnings then were caught in the market’s rotation or foul mood and dropped 20%. I was worried Saul might re-injure his shoulder he pounded the table so hard on that one.
Now Zoom Info, which was up 16% after a stellar ER suddenly fell back to almost even for the day due to some insider sales. And it’s up about 20% since that drop. I sold a third of my beloved TWLO to add to that ZI drop because the Golden Moment is not to be missed. And they disappear quickly - like magnificent moments in a fantastic sunrise.
Though I like Twilio much better as a company what’s become clear is that Short Term Narrative + Smaller Market Cap is often a better stock pick than a Large Cap Company with an Excellent Long Term Narrative.
As Bear noted earlier about selling out of his Cloudflare position it seems to me that our board is evolving. Many saw Data Dog was due for a big win, and Cloudflare likely to drop. Elite investors like A Thinking Fool literally laid out Data Dog’s entire year! And it played out exactly as he said. Exceptional. I think as it gets easier to access information, to analyze it together and as we monitor a smaller group of stocks from various angles, over time, our collective wisdom grows.
“The Golden Moment” is a shout out to the Grateful Dead doc, Long Strange Trip on Amazon. It is a powerful story about one of the all-time great bands and filled with profound lessons relevant to investing. It’s about authenticity, alignment, courage, vision, teamwork, hard work, endurance, friendship, accepting trade offs, refusal to compromise and being the right people in the right place at the right time. It is a great example of how much power there is in teams that truly love each other, that have each other’s backs, that have built equity in their relationships. Consider Matthew Prince and Michelle Zatlyn of Cloudflare who went to grad school together, had a vision to revolutionize the entire Internet - and survived the loss of their friend and partner, Lee Holloway,
The Devastating Decline of a Brilliant Coder
And the documentary hits branding and the importance of a name. They were originally called, “The Warlocks” but that name was taken and one day Jerry Garcia opened a book and saw the term, “Grateful Dead” which triggered something deep within him. As a kid he was inspired by the Frankenstein myth and incessantly drew the Creature. The name tapped into his fascination with how strange life is, how powerful death is, how he didn’t fear it, how accepting it makes you live more urgently, work harder to make the most of your time and the name was essential to their astronomical success. It also tied deeply into his defining experience: the loss of his musician father at a very young age.
We each must find our own way into our stocks without just ripping off Saul picks. For me, this is a filter I use. I love DocuSign and ZScaler - excellent companies. But they don’t have that marketing edge I like, that shot of raw emotion. I bought both but literally as I was pulling the trigger I knew these marriages would not last. Just because someone is gorgeous, intelligent and wonderful doesn’t necessarily make them right for you to marry. The one common trait I see in our best investors here is they know what game they’re playing and can articulate their rationale for every pick. As Stock Novice often says, focus on the process, which you can control, not the results, which you can’t. Very John Wooden-esque there Novice.
Anyway, here’s the trailer,
Long Strange Trip
Please do not post about this, just email me on it if you want to share thoughts.
“… part of the value of being in an extended family is that it enlarges you. It makes you bigger. It makes you more.”