Dreamer-
I think you articulated the risks in these companies pretty well. I don’t have much to add to these specific companies…I’m long GLBE & UPST and I think that recession hits UPST harder than GLBE. Not because UPST is inferior, but GLBE can process many more transactions based on the value of those transactions being generally less than UPST loans. I put BILL in the same camp as GLBE; that is, if small businesses in a recession have sufficient funds and business to warrant a subscription. Similarly, is there enough business goin on to justify MNDY collaboration in a recession?
Given your attention to valuations, I came across this set of tweets that tends to support your thesis as it relates to 2000 and today. Lessons 5 and 6 seem appropriate here. There are charts with each tweet. https://twitter.com/corry_wang/status/1345194418085752834?s=…
"7/ LESSON #5: Most large cap tech stocks in the bubble had real businesses with strong fundamentals
The internet stocks were a sideshow. In 2000, the software sector had a $1 trillion market cap, 20% net margins, 20% annual growth
The problem? It was trading at 16x sales
and…
"8/ LESSON #6: Fundamentals follow price, not vice versa
The bubble popped in Q1 2000. Fundamentals didn’t decelerate until Q4 2000.
It was reflexivity at work. Lower stock prices = less capex spend = less revenue growth = lower stock prices. A vicious cycle."
As much as I wish I had less exposure to some of the stocks I hold, I can’t seem to do anything other than hunker down (i.e. Champ). I’m not fully invested, as I have about 1/3 cash. However, next year I start drawing on my accounts for income, which adds a degree of angst!
I also think of the Putin effect on security and observability companies…I hold DDOG, ZS, S, SNOW, NET. My thought is that companies ought to feel the need to have products offered by these companies and pay for them early in the budget…of course your position is probably they are still too expensive regardless of how their business is doing and prices will contract because of those valuation. You are probably correct.
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