No. of Recommendations: 9
One of the factors an investor needs to consider especially in holding stocks like these, in this time, is, "how crowded is the trade?"

There's already been a whiff of "risk-off" in ZS' price behavior the last couple of weeks. Reminiscent of past "darlings of the growth market". If for some reason they don't beat & raise handily, or growth is more than 5% off expectations, it's a crowded trade and there would be an inordinate dumping of shares & price drop.

Conversely, if they crush estimates and growth projections, at their already elevated market cap is there a mirror-like move up? Or because it is so heavily owned already by hedgies and growth/factor/tech/momentum/whatever ETFs would it be a more minor move?

Combine that assessment with how much of one's portfolio that stock makes up... and the future regret one will have over a perceived loss from these levels, which will be greater than the future happiness one will have over an equal gain from these levels...

We all wish we'd held on to MSFT, AMZN, AAPL, NFLX since they went public, but it's unrealistic to expect it of ourselves psychologically when they've all had 80-90% drawdowns at some point. FWIW I pick a number like 8-10% drawdown expected for most stocks, double it for these and consider selling when they've dropped 15-20% from their highs. If it's between earnings reports, a lot of it is just noise, but some of it is true insider info-driven.

Is ZS really "worth" 58% more than it was in mid-January? Who knows - there is some "greater fool" element in owning these low/zero earnings high growth stocks.
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