However, we did not design the product with the foresight that, in a matter of weeks, every person in the world would suddenly be working, studying, and socializing from home. We now have a much broader set of users who are utilizing our product in a myriad of unexpected ways, presenting us with challenges we did not anticipate when the platform was conceived.
This is what Nassim Nicholas Taleb calls “a good black swan!” While the product was designed for a small but rich market the good black swan created a huge market of smaller less sophisticated users and a set of new, unexpected use cases. Along with the good come a set of new challenges but nothing that has not been dealt with before.
My view is that those who sold based on the pre good black swan valuation made an understandable mistake, because they missed the effect of the black swan event on Zoom. I reacted about two weeks ago
The S&P 500 (down 31.9%) and NASDAQ (down 29.9%) topped out on Feb 19. There is more economic pain to come but there should be a select few winners among the carnage. Many Fools have already capitulated. Some telemedicine related stocks have done well as well as some Saul stocks (Saul is up YTD).
This past week I decided to change tactics, instead of relying on the Covered Call Selector, I’ve decided to stay long five covid-19/telemedicine stocks. Time will tell if it was a good choice.
https://discussion.fool.com/covered-calls-change-of-signals-3444…
If my analysis is correct, Zoom has a long runway ahead.
Denny Schlesinger