Thread by @InvestiAnalyst

Friday Musings:

Amidst this taper, my focus is Cloud, Security & AI/ML:
• $SNOW | $S
• $ZS*
• $DDOG*
• $PLTR* | $NET

Non-SaaS:
• $TOST | $DLO
• $GLBE
• $BILL*
• $AFRM*

*Existing positions
+Others: Watchlist

The internet has not broken yet.
Some quick thoughts 1/

2/ My priority is to focus on companies that can sustain 30-40% growth rates for a 3-5yr.

The market is looking for companies that have growth PLUS (optionality, product-lock-in, switching costs, mission-critical) to deduce the durability of a 3-yr CAGR to decide its multiple.

3/ Other things is looking for 30%+ CAGR Rev growth combined with lock-in, high land & expand DBNRR?

Alternatively, for non-SaaS companies. I'm looking for companies that are still relatively early in capturing their TAM and are showing qualities that they are market leaders?

4/ There are MANY value traps that will not recover for years.

The biggest question to ask yourself before buying any dips is-

Based on a company's competitive advantage, what's the durability of their rev growth and eventual earnings power over 3-4yrs based on today's prices?

5/ My sympathies to anyone in $ASAN, $DOMO and $DOCU. In my opinion, the extra sting in their severe dip over the last 24-hours is that the markets hates deceleration and doubts the durability of their LT moat/growth.

Vice-versa: Look at strength in $DDOG, $SNOW, $ZS etc.

5i/ The challenge is that the most durable and high-quality companies will not become "cheap" by traditional valuation metrics.. You've gotta pick your spots.

As my friend @convequity points, SaaS companies quality, TAM expansions, and margins are higher than "07, dot com.

6/ For GARP'y names:

I've been building a strong position already in $GDYN 2-weeks ago but might add more (This is the strongest name in this market!). GDYN is a AI/ML Tech consultancy in the middle of digital transformation.

Other boring strong SaaS Co's: $FTNT, $PANW, $OKTA

7/ Likely things get worse over the upcoming weeks since the Nasdaq is only down 7%. Usually, these corrections bottom at 12%-18%.

This sounds crazy but I've borrowed and transferred new cash into my account as historically, the Fed Taper is the ULTIMATE buying opportunity !!

8/ This is an important period to be level-headed.

Personally, I've got lots of work and analysis to do this weekend before deploying my new cash. Will share along if I have enough time.

IMO, we'll look back to this period as a generational buy opportunity. Choose wisely. HAGW!

My portfolio is still very much intact from what I shared last weekend btw.

All the companies above are just some high conviction portfolio names and some watchlist companies that's I'm focused during this period (Dec - Jan 22). Cheers.