Not sure i would call it luck or its opposite but I find it hard to predict how the market will react to a companies performance at times. For example, i bought TTD last summer and now it became my first 4 bagger. I held as it went negative in revenue in Q2 and then watched as it came roaring back in Q3 to mid 30's growth and could hit 40% revenue growth next quarter. Is it the Jeff Green factor? Is it just the overall size of the market? My thesis worked out, I held because I believed the pandemic would accelerate programmatic advertising in the long run. I'm surprised TTD has done so well the past 6 months, yet I'm also surprised that Okta has been on par with the market the last 6 months, so it hasn't been that great. Both are great companies but sometimes the market doesn't value a company like we think they will or should. What do you think?
In a way, I think you answered your own question. While you found it hard to predict the market reaction to TTD's stock, you properly predicted ad revenue would return to TTD's business. Good for you, and you deserve all the credit for making that call.
In my experience, the market's value generally tends to reflect the quality of the underlying business. The stock squiggles in between are simply a part of the game. TTD is a strong company which the market has decided deserves a premium. OKTA is the same. As long as Jeff Green and crew continue to execute, TTD should continue to be a great investment. The same for Todd McKinnon and Okta. I think that's why both stocks have done so incredibly well.
I like your writing! Came here after reading your work (and others'!) at Saul's, Tinkers and MF. I read a book quite awhile ago that you reminded me of with this post. It's called The Luck Factor by Richard Wiseman. Of course, some luck is random. But quite a bit also comes from being open to seeing opportunities and creating self-fulfilling prophecies. I recall in the book they were able to run an experiment where people who were self-reporting as unlucky simply didn't see money laying on the ground. People who described themselves as lucky saw the money laying on the ground and picked it up. They were more open to seeing the opportunities around them.
I think this applies to investing, as well, in various ways. Over the past several years I've become more open to listening to the opportunities I see from certain places. This would be the crowdsourcing you mentioned above. I can look at a much smaller universe of potential stocks and then do my own research from there. If I have to do all of the screening and analysis myself, by myself, it just wouldn't happen. And then I'd be stuck with index funds.
Thanks for your work here and in the various forums.
Not sure i would call it luck or its opposite but I find it hard to predict how the market will react to a companies performance at times. For example, i bought TTD last summer and now it became my first 4 bagger. I held as it went negative in revenue in Q2 and then watched as it came roaring back in Q3 to mid 30's growth and could hit 40% revenue growth next quarter. Is it the Jeff Green factor? Is it just the overall size of the market? My thesis worked out, I held because I believed the pandemic would accelerate programmatic advertising in the long run. I'm surprised TTD has done so well the past 6 months, yet I'm also surprised that Okta has been on par with the market the last 6 months, so it hasn't been that great. Both are great companies but sometimes the market doesn't value a company like we think they will or should. What do you think?
In a way, I think you answered your own question. While you found it hard to predict the market reaction to TTD's stock, you properly predicted ad revenue would return to TTD's business. Good for you, and you deserve all the credit for making that call.
In my experience, the market's value generally tends to reflect the quality of the underlying business. The stock squiggles in between are simply a part of the game. TTD is a strong company which the market has decided deserves a premium. OKTA is the same. As long as Jeff Green and crew continue to execute, TTD should continue to be a great investment. The same for Todd McKinnon and Okta. I think that's why both stocks have done so incredibly well.
I like your writing! Came here after reading your work (and others'!) at Saul's, Tinkers and MF. I read a book quite awhile ago that you reminded me of with this post. It's called The Luck Factor by Richard Wiseman. Of course, some luck is random. But quite a bit also comes from being open to seeing opportunities and creating self-fulfilling prophecies. I recall in the book they were able to run an experiment where people who were self-reporting as unlucky simply didn't see money laying on the ground. People who described themselves as lucky saw the money laying on the ground and picked it up. They were more open to seeing the opportunities around them.
I think this applies to investing, as well, in various ways. Over the past several years I've become more open to listening to the opportunities I see from certain places. This would be the crowdsourcing you mentioned above. I can look at a much smaller universe of potential stocks and then do my own research from there. If I have to do all of the screening and analysis myself, by myself, it just wouldn't happen. And then I'd be stuck with index funds.
Thanks for your work here and in the various forums.
-JR
http://richardwiseman.com/resources/The_Luck_Factor.pdf
i appreciate the link - interesting read!
Great comment, JR. And thanks for the link. I'll check it out.