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Are you kidding me? Have you not aeen the correction we have had in tech stocks? A bunch of previously overvalued tech stocks have all fallen to all tim lows. TDOC, NET, NIO, COIN, BYND, SQ... Even paypal... A bunch of stocks have been crashing.
admittedly moat isnt as strong for TDOC compared to top tier SaaS growth stocks, such as NET, CRWD, etc. but it is also like 10 times cheaper. all that matters is this business is growing at 30% cagr for many yrs, already has rev base of $2B, has biggest market share in their industry, and has gross margin that rivals that of high tech growth companies, trading like at fwd p/s of 3x. the rest is noise.
I'd say more often than not, when a market is correcting, you're probably better off going into a new play than DCA'ing into an already existing play. You might be looking at the prices of some of your holdings like NET and PLTR and thinking to yourself... "My God, I can't believe how low these have dropped! These are tremendous values at these levels, I should double down." But, if the entire market is in correction mode, there could be other stocks that are much better overall investments. They might not be down as much percentage wise, but that's mainly because the market in general views them as less risky than something like NET or PLTR, so it's not punishing them as much. I just think it's very tempting from a psychological standpoint to think about your investments in NET and PLTR in a better light if you double down on them and lower your cost basis considerably. But is that really the best place for this money? It might give you the warm fuzzies inside, because that new, lower cost basis will make you feel much better about your original error. Truth is, the money that you're going to throw into NET or PLTR to dramatically lower that cost basis might be better off going into something else.
Thanks for the reply. I've been busy with my new job last year and have not paid as much attention to the market, esp the tech companies, as I prefer to. I need to do some research on the companies you mentioned. I admit with some shame that I bought some CRM without doing any homework when I saw Nancy Pelosi bought the leaps. Do you happen to know the trigger for the price slump for SQ and ATVI? From what I recall they are still solid companies and I haven't seen SQ at the current price level for a while. >every Chinese tech stock if you’re into that Oh I still have a lot of TCEHY shares. I unloaded some when they were around 75. Who knew they would've fallen so fast right after reaching almost 100. SMH, at least I didn't buy EDU. NET is something I couldn't figure out. I think it's a great company with brilliant products and a decent moat. No idea what caused the price plunge. Never did much research on MTCH. I assume COVID is keeping people's libido in check. Thanks again!
SQ, COIN, NET, CRWD, MTCH, ATVI, DKNG, CRM, PLTR, SOFI, and every Chinese tech stock if you’re into that. Those are just the ones on the top of my head that I’ve been looking at. I’m sure there are many others. Some of these are probably closer to 40-50% off highs, not 60%+.
Many non-tech companies are largely becoming them over time, even John Deere. I guess this is where Microsoft still feels like a great play to me for the next 5-10 years. They make things the larger institutions invest big bucks in. Amazon and Google are also good but need savvier tech divisions to make it work well. Microsoft aims for more plug and play types of things. I saw recently that NET is way down now, I think that’s an attractive buy since they make solid products the rest of the industry uses a lot. Their value in recent months seemed like a big pump and dump which is too bad since I otherwise like their company. Looks like they’re gonna make progressively bigger cloud plays too.
You should buy the stocks that you think are going to do well. Whether you do or don't have existing positions in a company shouldn't have anything to do with it. With all your positions you need to be looking at what the costs/benefits are of holding and selling. A big issue is taxes--will you owe taxes if you sell, or will you get a tax advantage from the loss? If you owe taxes will these be greater than any continuing loss you anticipate occurring? Will the stock bounce back and how much? So, for instance, I like NET as a company long term but I sold it early in the year because I believed it had a lot further to fall (and have no real idea how far) than the taxes I would pay on the gains. It would take something really, really big (like clear indications of a market wide crash) for me to sell Amazon or Microsoft because I look at them as relatively stable and I am not going to f around with trying to game whether a drop is going to be bigger than my tax bill if I buy in later. Or if you believe a stock is at an unsustainable bottom (perhaps BABA) then trying to time it for tax purposes may not be worthwhile because if you like it long term you are likely to buy back in at a higher price.
What I do on longer term holds is compare the stocks that are down to their historical valuations, and depending on their situations, whether the stocks are down due to the entire market being down because of interest rates, or because of company-related reasons, and average down the ones that seem like they are undervalued based on what other people payed for in the past. For example, I might buy more GOOGL because even though it is down less than something like NET or SQ, GOOGL's valuations are stellar even compared to its historical valuations so I would feel safer in there than on some of the stocks that are still very far away from what investors have paid before.
Been shorting NET since $200, closed more than half still have 50 shares short. Not sure how it got pumped so hard but it Was like a $60B mc on $200 mil rev per quarter so way out of wack. Now still $30B mc. AKAM is similar and makes $3B per year rev and is valued at $18B so I think NET is worth around that valuation or less so be careful.
This time, the FED completely avoided the 2000 type bubble somehow, the ridiculously overvalued stocks like SPCE, WISH, CLOV, SQ, NET etc are all already down more than 50% from all time highs. There maybe another chance for bagholders to get out between Feb and April, observe the flow
>CFTC-SPECULATORS INCREASE CBOT US 10-YEAR TREASURY FUTURES NET SHORT POSITION BY 66,916 CONTRACTS TO 343,839 IN WEEK ON JANUARY 11 ^\*Walter ^Bloomberg ^[@DeItaone](http://twitter.com/DeItaone) ^at ^2022-01-14 ^15:41:43 ^EST-0500
>CFTC-EQUITY FUND MANAGERS CUT S&P 500 CME NET LONG POSITION BY 438 CONTRACTS TO 147,051 IN WEEK TO JAN 11 \>CFTC-EQUITY FUND SPECULATORS TRIM S&P 500 CME NET SHORT POSITION BY 7,911 CONTRACTS TO 12,913 IN WEEK TO JAN 11 https://t.co/f9H0ZFEB0E ^\*Walter ^Bloomberg ^[@DeItaone](http://twitter.com/DeItaone) ^at ^2022-01-14 ^15:29:20 ^EST-0500
I bought some more APPS, SOFI, and RKLB, for cost bases of 54.87, 15.57, and 12.83, respectively. Pretty happy about the APPS opportunity as well as RKLB. SOFI I'm still not very happy with. But I trimmed my NET/PYPL by a share since they were overweight in my portfolio (together, nearly 6%).
I love to think the last few days have just been because of kids freaking out that other kids are freaking out. My two stocks got hit hard NET fell 50% but I'm still way up over the last year. No idea what you guys are actually doing
Ha, I do that, but it also fucked me over with NET and NVDA as they went stratospheric. And sadly locked me into them as they rose and then fell. And fucked me when AAPL went to the 150s for the first time. I don't sell them at bottom but manage to time it terribly even so.
Yeah, the crypto stuff with SQ seems to just be increasing, which is interesting but also I'd love for them to focus more on their core business. I actually got into NET at $35 so that bit is doing well, but added more at $110 when it dipped before the big runup, then more at $150 after it started its big dip from $215, so unfortunately I'm underwater despite my $35 shares. Should have had more patience.
SQ has been so frustrating because I know that everything about the company is great and their model is solid but its like because they're venturing into digital money space its a no go for a lot of people. I bought NET at like $25 a few years ago because I knew the company was gonna do great so im still up on that one thankfully. If anyone you should pick more of that one up.
So many. SQ/CHWY/NET/MQ off the top of my head all of which I totally believe in but to be fair all of which went up so much that I should have sold, and then as they came down to my buy point was like oh they'll go back up again but no just down haha. Have to laugh at this point...
I like to use a range of reasonable P/S ratios to generate possible targets, based partly on the stock's historical P/S pattern. It's harder to do with companies that haven't been public very long, but it's a starting point. With a stock like NET, I think it would make sense to go back to early-mid 2020, before it took off on its crazy ride. At that point it traded at a P/S between 20 and 25. Multiply that by the 1.91 sales/share gives you a target price range of roughly $38-$48 - which, coincidentally, is right around where it traded back then. That's probably the worst case scenario, as it would represent a cut of about 77% from the ATH, but given how many other high fliers have been hit that hard already, I wouldn't be shocked to see that happen. You can also use technical levels to generate targets. The stock did base for about 6 months between roughly $65 and $85 during the first half of 2021, so that could provide a level of support.
I found doing anything opposite to the hive mind of this sub is generally rewarding. I got in BABA at $110 when everyone said it is hot garbage and will be delisted soon, I got in F at $13 not too long ago when everyone here said they have huge debt and all legacy car makers suck ass, I stayed out of NET and CRWD despite everyone on this sub says they are the future. The only and ONLY sounding advice in this sub I follow is to put at least 50% in index, which is too obliviously, isn't it? I also found when everyone thinks the market will bounce tomorrow, it usually slides. Then I realize probably 80% of this sub is new investor (calling investor is probably too generous) and hold fractional share only.
/r/thetagang this morning One of us, one of us! So on 12/1 Cloudflare (NET) had a big red day, and I sold, what I thought were 10 Cash-Secured Puts (Stupid I know) for 1/21 140 strike. I am 34 grand in the hole already, and NLV is \~22,400 after today. I also just realized, that these puts are not cash-secured and I won't be able to take assignment on these. Really didn't expect Cloudflare to go down this much. What are my options in this position? I've had to BTC two contracts to avoid margin call already. When will this stock come back?
I have a cost average in the $70s, rode it all the way up and down. NET is for sure a bit overvalued but you also have to understand that they have an excellent chance to be great, which is why they are going to be trading at a premium imo. If it fell down to my cost basis I would be adding to my position 100%. Last quarters report was nothing but positive and I expect the same going forward.
I love NET, but I buy because I love the company, not for the valuation. When it hit $200 I sold down a lot of my position because the move made no sense. I think the valuation now is okay. I've brought some, but it could go down more. If you genuinely like the company and are in it for the long-term now is probably a good time to buy simply because you may not get a better time. $50-60 imo would be closer to something approaching fair value.
Very bullish. Roku has yet to fully monetize. Some of the biggest profits comes after active account growth starts slowing - look at AAPL. Most of it's growth came after it's active accounts slowed down. Streaming environment is very favorable for Roku. PlutoTV, Tubi, Peacock, and other AVOD's are some of the fastest growing streaming services, growing faster than even Netflix, and Roku takes a 30% cut of all ad inventory. Roku Channel has also grown significantly and they get a 100% cut of ad inventory there. The market is slowly tilting towards Smart TV's over smart dongles. Roku holds a very strong position in the Smart TV market, with more TV manufacturers on-board than any other OS. Their lean, efficient code allows their partners to sell their TV's at a lower cost than others. Roku Tv's also start up faster and run better - TCL recently had to pull it's GoogleTV lineup from sale due to performance issues - https://androidcommunity.com/tcl-google-tvs-pulled-out-from-best-buy-due-to-performance-issues-20211213/#:~:text=TCL%20Google%20TVs%20pulled%20out%20from%20Best%20Buy,made%20TCL%20discontinue%20selling%20its%20Google%20TV%20lineup. On the original content side, Roku has already proved it can produce profitable original content. They were able to leverage their Quibi content to launch further into original movies and TV's, with a focus on shows that appeal on the AVOD side like family, kids, reality, etc. Their original Zoey's Extraordinary Christmas was the most watched show on the Roku Channel. On the financial side, even with the big loss due to supply chain pressure Roku was still able to improve their margins to over 50%. Their margins have been improving every quarter, with the hardware business increasingly becoming insignificant in terms of affecting their revenues. Their margins, even with losses on hardware, is comparable to cloud companies like Fastly. Granted, they don't come close to the margins NET gives, thus they will never reach a 20-30x sales valuation like NET will with 80% margins. Their hardware business, I wouldn't price at more than 2x sales. But their true margins on platform is hidden by their hardware losses and a lot of hidden value can be released here. I wouldn't hesitate to pay 10x sales for their high margin platform business, which will reach $3.5 billion in 2022. Just going by platform, they are already a strong buy at current prices.
It is a very crowded space including some deep pocketed competition such as MSFT, IBM and ORCL. That concerns me. FWIW, my CS ranking is ZS, CRWD, PANW, NET/FSLY & OCTA. I'd start positions at the 10 delta for weekly puts, roll down and out for a credit when tested, and then start building a position once this sell off ends. My $0.02.
None of those ratios matter like P/S for a company like NET where the revenue growth is very high and it is possible that NET will be bought out at some point. You think NET will still have 500M revenue in 5 years from now? Right now they're plowing tons of cash into R&D and are likely to dominate in this space for decades to come based on the tech they're developing now. Pretty hard to value a company like that.
It’s an awesome company that is hurting short term due to that insane run it went on through November. Cloud/software companies are getting hammered right now and NET unfortunately is on the big receiving end. Still a SOLID long term company but if you are looking to buy I’d wait a bit, still pretty expensive for its current price. Though if it’s something you want to hold long term no shame in buying on dips like today and DCA if it keeps going down.
That's probably it, but then the question becomes what's a reasonable price. Can't use stuff like P/E because it has no GAAP profits. Can use stuff like P/S but those are kinda out of whack (I think its P/S is 50 right now, so when would it be reasonable? 25? 10? If we were to go strict value, then the P/S would probably be no more than 8, which is AAPL's P/S but with less sales growth, but that would mean NET is actually worth only 1/6 of its current value or about $16 a share, which sounds absurd.
[SNOW put update](https://imgur.com/a/NvsLvo1) I'm going to paste something I wrote earlier today in the daily: I really don't hate SNOW long term, but between it and its regarded P/S cousin, NET, I think NET's business model allows for far more growth. SNOW is really dependent on nominal increase in data flow to increase revenue due to their consumption model. Obviously the amount of raw data flowing back and forth in the world has and will continue to increase. But it was certainly supercharged by covid and the WFH movement. It achieves ~85% of revenues from jobs on Amazon Web Services, which is also Snowflake's biggest rival. I don't like that. And I don't like the potential for acquisition down the road either, given the political climate surrounding tech monopolies. They also claim a $90 billion TAM, when all the cloud platforms brought in $60 billion revenue combined in 2020. Just ridiculous. In order to break even in 5 years, at the current price of $296/share, SNOW would need to achieve the following: 40 P/E 20% Profit Margin 62% CAGR, or: 11x revenue in 5 yrs. All of that in the face of what I mentioned before. As Ben Graham said: “In the short run, the market is a voting machine but in the long run it is a weighing machine.” Going long SNOW, even at these levels, is a vote that the company will exceed the growth rate that is priced in, plus whatever risk-free rate you want to assume. Rotation to fundamental-driven allocation continues.
Yes, yes it has, every week it hits a new low, and I think “huh, 14 seems a good price to avg” and then it jumps over 10% the next day, growth right now is bumpy af Lool bro you were begging for a tasty NET dip, here it is!