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No. of Recommendations: 5
(Re-post -- seems to get the formatting messed up)

Most of our SaaS stocks are selling off steepily today, after a solid several weeks. There are no fundamental news to the entire sector that I can find. A weekend Barron's article warned "Sky-High Software Stocks Are Beginning to Look Like They’re Forming a Bubble":

The arguments are mostly the same as all the previous articles of this kind:

(1) many software companies are now valued at more than 20 times projected 2019 sales without any earnings. No major industry has a higher valuation. Many appear to be priced for perfection, which makes them vulnerable to small disappointments.

(2) sentiment shifts. Growth stocks have been in vogue for a decade now. If investors ever shift back to value, software sector could reset to a lower valuation.

(3) Accounting. Software is one of the few remaining industries in which investors do not focus on GAAP earnings, in particular stock compensations.

(4) Acquisition no longer applies. The rally in software stocks has left many software issues trading above takeout multiples such as SAP and CRM's recent acquisitions.

Other than the Barron's article, another thing I noticed is that there might be a pattern of profit taking around end of month for our stocks. Does anyone else see this?

Personally, I am taking the selloff as an opportunity to add to a few of my SaaS positions today.
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