FSLY pre-announced lower guidance yesterday due to the TikTok soap opera. Not much, But when investors are looking for these companies to increase growth and surprise to the upside, they inevitably get pummeled when they don’t. I am not buying more today (As I might be doing if they were dipping without a fundamental reason), but I am also not selling all of my shares because I feel this is still a great company and this could just be a political blip gone again in a few months. An interesting round-trip for sure watching their shares the past two weeks. Because of the recent run up in FSLY and a bit of sheer luck, I had sold a small portion of about 10% of my shares in FSLY two days ago to add to my zoom shares In anticipation of their big conference. I will keep the remaining and only sold to reduce my position back below 10% in FSLY.
Zoom had some impressive new product announcements, lower expenses, and higher operating margins…still tough to predict how well they will do or how much they could crush their growth predictions. Go vote. Cheers!
Today has been a day of deliberation…I often speak of buying the dips in our companies when the fundamentals are sound. But by far the hardest part of investing is knowing when to exit a company due to fundamentals. The more I deliberated today, the more I felt several things: 1) My other companies were generally NOT down today with FSLY and FSLY dropped on their pre-announcement. 2) FSLY had a fierce run up from 80 to $130 the past month. I Wish I had trusted my gut MORE yesterday when I sold some FSLY at $125…I started off today selling just a bit more in my IRA to balance things and then capitulated and sold only the remaining shares in my IRA also..and only kept my NON-IRA shares (taxable) representing about a 5% position now. I just don’t see the upside that I did before this pre-announcement and now they have confirmed it, what catalyst is there for any kind of beat in the earnings call…are they really going to beat revenues significantly after just guiding down yesterday?? I think not. That would be rather silly. Anyway, I used the proceeds to buy ZM yesterday, more DOCU today and a little more NET in my IRA (I have written many times that I believe NET will win the CDN race long term over FSLY, and the recent 50% surge in stock price indicates others may be catching on to that fact and realizing their solutions give them a MUCH larger potential TAM. All that said, I have a fair amount of cash now (about 16%) on the side anticipating a market dip for at least a few weeks going into elections on the anxiety and uncertainty around the plethora of beta factors right now: elections, potential vaccines, clamp downs in Europe, rise in sicknesses around the world, lack of congressional aid packages, etc. Getting crazy out there and probably will continue to be for a while. Just my thoughts, of course…which along with $5 will get you a cup of coffee at Starbucks! Just thought you might like an update on my actions. Stay safe and don’t succumb to the “pandemic exhaustion” and start doing stupid things right now at the exact wrong time in this virus cycle. My sense is its going to get a lot worse before it gets better. Stay safe, stay healthy, wear a mask, socially distance yourselves, and wash your hands. Cheers, folks!
