Kapil99,
I want to apologize for my sarcasm and try to give you a real answer based on what I’ve learned from Saul and other really intelligent investors with many years of experience who follow this board.
The question you asked is essentially a question based on a price anchor. The underlying “logic” is something like questioning the potential for a stock to rise any further after a rather spectacular run-up. It is completely based on stock price rather than the underlying performance of the company.
Look at it this way, would you have asked the same question if the stock had plummeted 30%? What question might you have about the potential for this company’s stock performance if you had no stock price history whatsoever? What if every day was a new day and there was no memory of yesterday’s stock price or last year’s?
If you’ve read any of Saul’s posts can you point to a single one where he alluded to the stock price as a significant factor in a purchase decision. Why would it be different for Twilio today than it was yesterday? What has materially changed about the company?
Pragmatically, there may be some profit taking and the stock may go down a few points over the next few trading days, but Saul has advised time and time again if you buy great companies with stellar financial performance and a more or less niche monopoly you will not even remember if you bought the stock for a few dollars more than it was a few days after you bought it. Then again, it may continue to rise and you will still be on the sidelines waiting for that few dollar cheaper entry point.
You can’t time the market and you most certainly can’t time the performance of a given company’s stock. If you think Twilio is a really good investment based on their performance and their products and their market penetration . . . basically, based on the business. then do what Saul does, buy some. Maybe not a full position at first, but get in. Don’t worry about the stock price.
We’re growth investors here and we make money on appreciation of the stock. But the stock price is more like validation of the purchase decision, not a deciding factor in and of itself. If we were value investors, the story would be different and the stock price would be vitally important. So you need to make up your mind which game you are playing and which rulebook you are going to follow.
You might also consider just why Twilio shot up the way they did. Maybe it has something to do with the fact that they are the premier communications company. They’ve just introduced a slew of new products and they’ve merged with the leading commercial email provider so they offer telephony, messaging and email services. Who’s their competition? Really there is none, or at least none that is significant.
Will the stock price go down tomorrow? Maybe. Will the stock price be higher a year from now? Almost certainly.