Good morning. Nice contrast this morning to the other day of red. As mentioned, man made crisis are sometimes an opportunity when you own great companies. I picked up a little more ESTC, and a little PINS, but keep in mind I was already pretty much full invested, so was using funds from the SQ downsizing to build my ESTC and get a very small starter position in PINS. To be clear, PINS is highly valued and I’m still analyzing it. Not sure how it will fall out yet, but it’s an exciting little company. Did anyone buy or sell the last week in the midst of the chaos? How did you react in the time of pressure. Feel free to text me separately if you want. Curious and happy to answer questions.
User comment: Hi Victor, congrats on picking up some more stock in the pull back! I did not invest or sell. I am of the mindset of holding for a very long time and need the cash for other non-stock investments at the moment. Thanks for all the support and information!
Victor: Nice! Staying the course has been my best ally the past 10 years. I see too many people “panic sell” at the day or week lows when there is nothing wrong with the company or necessarily even economy. I can count at least 5 occurrences in the past 2 years when the portfolio dropped 5-15% in a day or week (late Dec 2018, for example) and then came roaring back 21% in the following month of January and 100% in July YTD 2019. Those who panicked and sold in those temporary crises may have missed part or all of the rally. I always try to remember that the stock price does not necessarily reflect the value of the company. If the company is solid, has good fundamentals, rapid revenue and customer growth, no debt, recurring revenue, etc…ultimately in the long term the stock price will follow the fundamental company growth. We will definitely have another recession (eventually) but the current indicators are not showing one and holding cash at these record low interest rates (and dropping) just is not appealing to me. It doesn’t even match inflation, so you are technically losing the purchasing power of your money every year. And I’m betting that the market will continue to roll higher for at least another 6-9 months…throughout the presidential election…and that the current administration will do whatever needed to keep it humming along…as can already be seen recently. All that said, the fundamentals of the companies I own are incredible. As long as they continue that trend, I will stay fully invested in them. As I pen this, todays gains get us almost back close to 52 week highs on many of our portfolio stocks. It will continue to be an interesting roller coaster ride! Cheers!!
https://seekingalpha.com/article/4281337-elastic-hyper-growth-dynamo
If you want to understand Elastic and what it does, this is a nice article.
