No. of Recommendations: 2
Yes, Yahoo! Was the best of the best, one of the fundamentally most sound of any company in history and in a few short years it was taken down.

The big disruption was pay per click, but also the better search engine while Yahoo! Tried to become a media company.

I remember the peak marketcap and saying to myself, (had I owned it) SELL! I had one client, who was a secretary at Yahoo! Who did sell. She was worth $10 million when she came in for a consult. Others got lost in greed.

There is no comparison, at all, between the bubble then and the market now. The only complaint that people have is that there is a new business model that is disrupting the old world and growing rapidly with what seems to be with switching costs and enormous markets. And thus such companies get higher valuations...for shame.

No one could defend 100x revenues. And frankly Wall Street did not care. Literally, they hired young people right out of collect, as “analysts” and they would go to stock presentations and then take questions. The answers were pre-scripted and these “analysts” memorized them rote and gave the same response over and over again as if a politician or a criminal taking the 5th. I did not know any better at the time but it seemed so weird that way. A good question would be asked, and the analyst would give a rote canned response that was exactly as the prior response.

Wall Street was selling stock. Wall Street is a bit better today, but we all know that underneath it all it is know different. It will get away with anything that it can get away with.

If Zs, for example, could not easily grow into its present valuation (albeit that is the investment risk) then we would not even being talking about it. If Zs’s marketcap to real and raasonable opportunity was not as it is, and instead was like what was, we would not even being talking about it and I think even i would now be in cash.

As things stand now, it seems far more likely that the market is either going to sputter or crash rather than take off again. Hey, I am not blind to that. I just cannot spend my life trying to time the market. I just cannot do it. I am not a professional investor. And doing so becomes an obsession.

Ii invest. When I sense opportunity as I recently called the Zs and MDB bottoms, I go for it. When I get it wrong, i pick up the pieces and move forward. But I cannot sit around for weeks and months trying to deploy money at just the right time given the current trends. Frankly, this current bear like market has been called for every year since at least 2011. Perhaps they now got it right. Won’t matter if the business fundamentals hold. Will matter, bull market or not, if they don’t.

Either way, if not in a bubble, it all comes down to the business fundamentals. Arista, as an example is still a fine company with great cash flow, but as we all know it is no longer growing into its opportunity nearly as fast as it use to be, and frankly its opportunity to marketcap is not much smaller.

Bull market or bear market made no difference. You can see this with Arista throughout the year that is split up between bull and bear. Arista’s only exceptional move came when it was added to the 500, and thereafter, even in the bull portion of the year it settled back down consistent with its now more tame fundamentals.

Bull or bear, did not matter. It was the fundamentals. For those with less risk taking instinct and longer time frame, Arista may still be a clear market beating investment. But it is not the bull or bear that defined it, it is the fundamentals. I doubt anyone can make an argument otherwise with Arista or with Nvidia or with Talend.

There are other more ambiguous stocks like PURE that seems way undervalued, and yet the market persists bull or bear.

In the end, no bubble, it all comes down to fundamentals. Price and multiples tell us a lot about fundamentals - but they are only prognostications. But very good ones. Not perfect, but good. Thus that is not all we look at. But in the end, fundamentals in the context of growth and CAP and SAM (to counter the misuse of TAM)

Tinker
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