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No. of Recommendations: 172
For the first time, I think this board is truly showing signs of herd mentality. Most of this board was extremely late to invest in Fastly... because Saul hadn't bought any yet.


Austin, That makes no sense at all !!! I got in to Fastly at $39.98. Eight weeks later it reached $102.80. That was up 157% in two months after I got in.

What the heck was “extremely late” about that!
That’s just nonsense!

Then when it hit its high of $134 plus, it was up 235% from where I bought it. That was more than a triple and a third in less than six months. What was “extremely late” about that! Austin, do you even know what you were talking about?


Besides, people don’t wait for me to get in to take a position. For a right-now example, I’m not in Pelaton, and even expressed my reasons for not being in it, but half the board seems to have invested in it as one of their largest positions.



This board is for learning how to invest for yourself! That’s why there’s a Knowledgebase and a side panel. In every End of the Month Summary I write the following:

You should never try to just follow what I’m doing without making up your own mind about a stock. In these monthly summaries I’m giving you a static picture of where I am currently, but I may change my mind about a position during the month. In fact, I not infrequently do, and I make changes in the position. I usually don’t announce these changes until the end of the month, and if I’m busy or have some personal emergency I might not announce them even then. And besides, I sometimes make mistakes, even big ones! Don’t just follow me blindly! I’m an old guy and won’t be around forever. The key is to learn how to do this for yourself.



Austin, are you sure you just aren’t unhappy because you love Fastly so much, and because you decided to stay in but the majority of everyone else decided that the story had become just too complicated, and they decided to get out, in whole or in part, and because the stock price just keeps going down in spite of your love for it?


I think that you misunderstood why I kept pointing out one negative issue about Fastly after another. It wasn’t that I wanted anyone to follow me. It was just that there are a group of people on the board who I have come to know over time and who I think of as good friends, and it made me feel sad to see some of them shrug off one piece of horribly bad news after another, and to see them keep making one excuse after another for the bad news. I felt I really should try to point out what was happening before their eyes. It worked for some and didn’t work for others. That’s life.

When I saw you write I’m very interested in Fastly’s earnings call tomorrow. There’s a very real chance that IF TikTok is no longer a customer, it could have been partially caused by Fastly “firing” them as a customer, and then all the stuff about TikTok moving because a US company couldn't support them. Another excuse. They moved to Akami, for God's sake, which is a US company headquartered in Massachusetts. When I read those, I figured that you were lost, already inventing fanciful excuses for a company losing its largest customer, which had been a rapid growing massive part of its business, and I realized there was nothing I could say or do to reason with you. Sorry.



I tell people to look at the evidence and when the picture becomes too complicated or changes for the worst, get out. That’s a basic part of what I teach, and one of the most crucial parts..

You were telling them that if you are in love with the company, ignore the evidence, make excuses for it, and hang on and hope for a turnaround as the stock keeps going down.



Here’s some of the evidence you were ignoring:

Revenue growth falling by 20 points in sequential quarters
Revenue itself actually falling sequentially (for the first time)
Falling usage by some large customers
New enterprise customers up only 7 in an entire quarter, while its competitor signed up 80 enterprise customers!
New paying subscribers up only 114! Can you imagine one of our other companies only signing up 114 subscription customers in a quarter?
Its competitor signed up 61 TIMES as many. (Not a misprint)
A new CEO, who doesn’t seem to tell the whole truth in his press releases and conference calls.
They fired their head of Sales and Marketing.
Their competitor has had Edge Computing going for two and a half years at least.
Fastly can’t seem to get it out of Beta and into wide circulation.
Increasing evidence that they had lost TikTok completely, their rapidly growing, most massive customer, and had lost part of other significant customers
Their competitor just came out with two weeks of announcements of stupendous new products, while Fastly was staying in Beta.
Their CEO gave a preannouncement and didn’t say that they had lost TikTok, which he had surely known about!

If that isn’t enough to give you reason to get out, or at least reduce your position, I really don’t know what is. Personally I feel that I would be out of my mind if I had that much evidence that a company that I was in had gotten that much more complicated, and then I didn’t at least reduce my position.

And now we know that their current estimate puts them at 29% organic growth for next quarter yoy.

After all, Fastly is now down over $66 from its high and $26 (and still falling) from when I started selling out at $95 in the aftermarket. It would take a 39% rise to get back to where I started selling out.


When I got out I wrote:

Here’s what I did about Fastly. I’m sure that plenty of you will disagree with me, and I acknowledge that I may be dead wrong, but here’s what I did, and why! Please remember that I’m not a techie. I’m just going on common sense, and here were my reasons…


I gave reasons. You didn’t give reasons for staying in except hope for a turnaround, based on three companies that you named which eventually came back after I exited, but neglecting to mention the opportunity cost of waiting it out, the myriads that didn’t come back, and the obvious fact that where I put the money has obviously done just fine, at 300% of where it started this year, while the averages are roughly flat for the year. It doesn’t matter what happens to the stocks you have exited. The only thing that matters is what happens to the stocks in your portfolio! But, to make yourself feel better, go back and look at all the companies I got out of in 2015 or 2016, for instance (instead of cherry-picking three companies that did turn around), and see how they have done compared to the progress of my portfolio since then.


I’m sorry you were so dissatisfied with how I run my board as to talk about a herd mentality. But right at the top of the blue strip at the top of each post there’s a place to click to start a new board, and you can start your own.


Best,

Saul


A link to the Knowledgebase for this board is in the Announcements panel that is on the right side of every page on this board.

For some additions to the Knowledgebase, bringing it up to date, I’d advise reading several other posts linked to on the panel, especially “How I Pick a Company to Invest In,” and “Why My Investing Criteria Have Changed,” and “Why It Really is Different.”
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