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Subject:  Re: Let's Refine the P/S Discussion Date:  12/8/2018  1:54 PM
Author:  putnid Number:  106431 of 115954

NPI stocks are almost all "S" curve growth stocks that we aim to own between the bottom and top curves of the "S"

When investors buy stocks with high P/S ratios, those stocks need to grow revenue at least 30%-40% on a yearly basis for many years into the future.

Just an observation: I agree with both statements. Here's the thing - the SaaS stocks so beloved currently will certainly follow the "S" curve pattern. But I contend that, by their very nature (software as a service just one click away), the growth phase will flame out far, FAR faster than the growth phases of famous companies that actually manufactured and distributed physical "stuff". It takes quite a bit more time to manufacture, advertise, distribute and penetrate large markets...many years, even decades. Not so with the SaaS players. They can satisfy their TAMs (I find most estimates to be specious) in a blink of an eye depending on word of mouth. When it comes to software, word spreads fast, very fast.

Enjoy the high multiples while you can. It'll be short-lived.
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