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1/ I’m sure many investors who started earlier this year are feeling pretty down right now
I first started investing in SaaS companies in summer 2019 after a huge multi-year run
A couple weeks later, we entered a large correction and my stocks kept crashing even after great ERs
I first started investing in SaaS companies in summer 2019 after a huge multi-year run
A couple weeks later, we entered a large correction and my stocks kept crashing even after great ERs
2/ I felt like an idiot for buying in at the top, but I believed in my companies and bought the dip.
What was supposed to be a 5-10% correction soon turned into 20%, 30%, even 50% crashes.
I made another mistake of buying too much, too quickly so I had to sit through it all.
What was supposed to be a 5-10% correction soon turned into 20%, 30%, even 50% crashes.
I made another mistake of buying too much, too quickly so I had to sit through it all.
3/ It was especially painful because I had no cushion of gains to fall back on, I was losing all my money. Worse yet, the stocks that I had sold to fund the purchases kept going up!
I first bought Livongo in early Sept at $30 and just a month later, it was at $15 on no news!
I first bought Livongo in early Sept at $30 and just a month later, it was at $15 on no news!
4/ This was really a formative period for me as an investor. It taught me the importance of discipline.
Investing is hard. Saying that is one thing, but you have to experience it.
If a stock drops 20% right after I bought it, would I be tempted to sell? Or excited to add more?
Investing is hard. Saying that is one thing, but you have to experience it.
If a stock drops 20% right after I bought it, would I be tempted to sell? Or excited to add more?
5/ In hindsight, I felt like I had just invested at the top of a bubble as earnings didn’t matter. Bears came out and said they warned us valuations weren’t sustainable.
Sell-side cut their PTs, citing peer group multiple compression. I still can’t pinpoint a reason for it all.
Sell-side cut their PTs, citing peer group multiple compression. I still can’t pinpoint a reason for it all.
6/ But I stuck with my convictions and didn& #39;t change my philosophy to what was "hot". It wasn’t until 4 months later at the end of December that these companies started to get momentum again.
What seemed so painful turned out to be a gift. $CRWD at $50? $ZM at $65? $LVGO at $15?
What seemed so painful turned out to be a gift. $CRWD at $50? $ZM at $65? $LVGO at $15?
7/ While multiples are much higher today, great companies always come back eventually.
Although there was a bubble in some spec stocks, I don’t think the high-quality hypergrowth cohort was.
We had multiple years worth of gains in 2020 and they need time to digest it all.
Although there was a bubble in some spec stocks, I don’t think the high-quality hypergrowth cohort was.
We had multiple years worth of gains in 2020 and they need time to digest it all.
8/ Few investors can handle the volatility required for high returns. Stocks that can go up 100% in a month can go down 50% just the same
Picking the right stocks is just half the game, having the right mindset is even more important and it& #39;s times like these that develop it.
Picking the right stocks is just half the game, having the right mindset is even more important and it& #39;s times like these that develop it.
