No. of Recommendations: 2
Just pulling a few out f my watch port. Here is your cheap port:

NTNX
NVDA
PSTG
TLND
Anet
TDOC
PVTL
CLDR
SWKS
CRM
APPLE

Think it will outperform?

Tinker
Print the post Back To Top
No. of Recommendations: 0
I say put together a comparable expensive port and see who outperforms. Except I bought what I own at materially les than current prices and the cheap port has dramatically underperformed during that period of time (even post-crash or post earnings or in Pure’s case earnings “bounce”.

Thus not fair in that regard. But there is a lot of potential in the cheap port. Let’s day we take Nov 1 as start date, not since the recovery.

Tinker
Print the post Back To Top
No. of Recommendations: 0
That portfolio is too much a gimish of large caps, etc.

You would be comparing its performance vs small caps of TWLO, MDB, ESTC, ZS?

I think there is a pretty decent likelihood that a portfolio of “value” tech stocks would defeat a group of stocks with P/S of 25.....but over more than just a few months....let’s say 3 years.

For example, starting from today’s close:

NTNX
PVTL
TLND
SHOP
SQ

As we both know, highly valued stocks can stay that way for longer than many think.....but not forever.
Print the post Back To Top
No. of Recommendations: 3
Yes, but present perceptions or not, how many are dedicated, just because, to hold a stock for three years. I look at 12 months an 1 day. And I hope and have the goal of just holding forever if I can, but I am not locked into the hope.

Thus why would I want to own some value stocks that may or may not outperform over three years. Either it is a comparison or not. The latest market crash and year to date figures, without exception, show the cheap underperform and they underperform substantially.

Find me an exception.

Tinker
Print the post Back To Top
No. of Recommendations: 0
No dispute about buying quality stocks.....so agree with what you are saying.

However, there is some dispute about whether buying a stock at P/S 25 will return greater rewards than a NTNX at 5.

Surely there must be some reasonableness to the valuation.

OTOH, I agree that the FEV/S makes some sense as well and that would seem to make stocks like TWLO seem less expensive than first glance.
Print the post Back To Top
No. of Recommendations: 0
Hey, I don’t disagree. Remember I refused to buy Mobileye...

Tinker
Print the post Back To Top
No. of Recommendations: 0
Surely there must be some reasonableness to the valuation.

Maybe, maybe not, but it seems to me that the successes and failures have more to do with it being the right company and the right time than it has to do with the valuation. Pick a company with the right story ... not just perceived as right at the time, but actually right as things work out ... and the valuation thing is likely to take care of itself ... at least for a while. Pick a company with a good story at the right time and know when to get out, and it doesn't matter whether the story is true in the end.
Print the post Back To Top
No. of Recommendations: 0
I would like to compare MDB, ZS, AYX (all with P/S around 20) against ANET, NTNX, MELI (P/S<10) over the next 2-3 y. My thoughts are that the market moderates the PS over the next 2-3y period so that despite the faster top line growth the former set under performs against the latter. We can check at 1, 2, and 3y mark. A 3rd option is to consider a 100% cash portion with 1/3rd cash deployed in the former set when it hits certain valuations such as a PS of 18, 16, 14 and so on.
Print the post Back To Top
No. of Recommendations: 0
As a (previous) buy-n-hold investor I've had some epic sleepers and losses. I also bought NFLX at ~$7/share and was too new and uninformed to sell it. Ever. The recent drop hurt me, not really at all.

As always, YMMV. Some prefer spicy chili, some don't.
Print the post Back To Top
No. of Recommendations: 1
If we are look at small to mid cap SaaS / fintech companies, based on current prices I'd put forward the following "cheap" candidates as a decent chance of significant outperformance over a 5 year period.

As with the darlings discussed here / on Saul's board, you have to be selective.

NTNX
PAGS
BZUN
ROKU
MIME
SAIL
CBLK
INST
YEXT
ZUO

I'll readily accept that "growth at a reasonable price" isn't nearly as compelling as "overvalued category crushers".

Buying category crushers at times when the P/S ratios compress would likely outperform the above buys today.

Thoughts?
Print the post Back To Top
No. of Recommendations: 0
That portfolio is too much a gimish of large caps, etc.

"gimish," I like that!

Denny Schlesinger
Print the post Back To Top
No. of Recommendations: 2
However, there is some dispute about whether buying a stock at P/S 25 will return greater rewards than a NTNX at 5.

I'd rather buy the "same" stock at $5 than at $10, but whatever the current price, we don't know what the future brings. Will not buying at $10 be a missed opportunity? Will buying at $10 see the stock fall to $5? If you can give me good odds this discussion makes sense, otherwise it doesn't.

If you have a truly long term horizon the only thing that matters is the quality of the business, the business model. Short term portfolios will be battered by volatility. What counts then is survival, will the stock bounce back? What killed my dot.com portfolio were the non-bouncers: Global Crossing, Global Star...

Denny Schlesinger
Print the post Back To Top
No. of Recommendations: 1
"I'd rather buy the "same" stock at $5 than at $10, but whatever the current price, we don't know what the future brings. Will not buying at $10 be a missed opportunity? Will buying at $10 see the stock fall to $5? If you can give me good odds this discussion makes sense, otherwise it doesn't."


Agree with Denny

The stocks i listed all have issues that lead a depressed multiple

As an investor, to find the next "150%" in one year stocks, you would need to have a belief that the P/S compression is due to an issue that will be resolved over the short to medium term. This is essentially about risk tolerance. The high P/S companies of of 2018 have been substantially de-risked, hence the high multiples

eg

BZUN - Trade war/China sentiment
PAGS - competition, currency risk, medium term growth rates
YEXT - improvement in op margin and rev growth rates due to increased sales hiring + voice search tailwinds
INST - a successful pivot into corporate education and successful CEO transition will lead to accelerating rev growth
ROKU - rapid platform & CTV growth rates, improvements in gross margin
CBLK - increased % of sales from cloud products

etc
Print the post Back To Top
No. of Recommendations: 1
As with the darlings discussed here / on Saul's board, you have to be selective.

NTNX
PAGS
BZUN
ROKU
MIME
SAIL
CBLK
INST
YEXT
ZUO

Thoughts?


Thoughtless of me, I don't own a single one of them. ;)

My best guess is that I'll hold mine longer than they will hold the above.

Denny Schlesinger
Print the post Back To Top
No. of Recommendations: 5
<< That portfolio is too much a gimish of large caps, etc. >>

Wait!! Is this the first time duma has given us a hint at who he is?

Many of us have disclosed a least a bit about ourselves on this board. Duma has so far declined (entirely his prerogative).

But he has just used the term "gemish"--usually spelled gemisch. This is a Yiddish term, mostly heard in NYC. Could it be?


Alan (probably missing the mark.....but always very curious)
Print the post Back To Top