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No. of Recommendations: 4
I started a position in CrowdStrike yesterday. I was silently kicking myself for not getting in before the ER and saw yesterday as maybe a chance to get a toe in the water. I’m saying “maybe” because even though today’s price action seems to show it was a smart move, I am actually taking the idea this is a bubble seriously.

Look, I get the arguments put forward by Saul and others why the valuation of these companies is justified. And I agree with those arguments. I’m just not sure ‘how far’ I agree with it. That’s why I just have a few small positions in companies brought forward by this board. And they are all security related, as I think growth-wise I think SaaS + security is a double whammy.

Usually though, when an investor or a small community of investors (I don’t actually know the size of this community in terms of ‘total net worth’) has a leg up on the overall market, the market tries to prove you wrong until it can no longer. When it can no longer, it will show lemming behavior and all jump on the bandwagon in FOMO mode until stocks get way overvalued.

The longer the current can-do-no-wrong situation lasts, the more we’re going to be inflating the bubble. That doesn’t mean we’re necessarily in a danger situation. Yet. Just be prepared for some of these stocks to drop. A lot. And the truly successful companies will see their stock recover subsequently. But it may take patience. And some may never recover. Which is OK, we could still come out ahead.

Mark
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