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Subject:  Re: Can we call it quits on FSLY v. NET? Date:  11/7/2020  3:52 AM
Author:  AThinkingFool Number:  73284 of 78005

It's all about the $, not about who is right or wrong.

In investing, there seems to be an element of hindsight or confirmation bias. I am guilty of it myself, at times. However, I don’t believe that just because a stock price is ‘x’ amount higher today in one company than another, that means in itself the decision to sell or hold is a correct one. Equally, if you sell out of a stock and it then appreciates by x100% or x300%, faster than the company you replace it with, this doesn’t necessarily mean your decision to sell was wrong. After all, you could make the same decision in two stocks, one could go well and one badly, so is your decision right or wrong?

What seems more important to me than the stock price movement itself is the thought process behind your decisions, which over time should mean you are proved 'right' more often than wrong. Personally I had determined to wait until the Q3 earnings call to decide whether or not to sell Fastly, and then I sold out ahead of the call in the end when I got new information that Fastly had lost most or all of TikTok and I lost confidence in the prospect of management raising guidance. This isn’t something I had factored in.

So was I wrong not to sell out of Fastly immediately? In hindsight, yes.
Was I right to sell out ahead of the call, better late than never? In hindsight, yes.
But let’s imagine that this time next week the TikTok drama is suddenly resolved and Fastly’s stock price rebounds to $130 a week later. Would I have been wrong to sell? In hindsight, yes.

And I’m sure we’d get an influx of posts telling us so.

You can see whether I am right or wrong is defined by changing hindsight in this scenario. It is less about ‘right or wrong’, and more about varying degrees of right.

Let’s not forget, at the day of Fastly’s lowered guidance the YTD returns of both companies were:
Fastly: +499%
Cloudfare: +261%

Would someone who had chosen Cloudfare ahead of Fastly up to that point have necessarily been wrong? You would have 91% higher returns holding Fastly. In hindsight, yes. But what if someone had appreciated the underlying business of Cloudfare more than Fastly? Indeed, many of the reasons that Cloudfare appears to be a more favourable investment to many of us today, were also true before Fastly’s lowered guidance and after Q2.

So while I think it’s important to learn the valuable lessons offered to us on this board, so that our decision making is the best that it can be in future, I agree that we should not belabour the point of Fastly vs Net and the decision to sell. We should instead encourage people to consider what/if any learning experience they have had from it.

My own personal learning from this experience, is perhaps redefining when ‘a story changes’. Perhaps simply missed guidance or feeling substantial uncertainty, or that the story is becoming far too complicated, is enough. This is one lesson Saul has taught. Everyone can make their own decisions based on the information if the story has changed for them, and whether it is right or wrong is also a personal reflection.

So I agree with the OP, let’s move on please :)
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