I don't disagree with anything you said there. I do disagree that there isn't a construct for both trading and investing in the name. It's not a name I'd overweight to any degree given the recent success of their model. Just not enough history. Also, I do have some minor concern about the past history of the management but that could fall either way, a return to old ways or with the understanding of how the history can make us better. I'm obviously hoping for the latter but can't ignore the past.
The great thing about investing via trading is that investors can always exit positions when the story changes, as I'm fond of saying. Stories are what lead me into my positions. When a story and the financial underpinnings come together, big things can happen. Add in an explosive segment of technology certain to grow many-fold into the future, and there's lots of opportunity. I can't take a "long" position and call it a one-year or even two-year play. When I take "long" positions, I do so with a minimum of 3 years of desire, 5 years in hope. But when the story changes, I exit all or a portion of the position.
In my history, not evaluating and pouncing on intriguing trends has much greater cost than scaling into a position and exiting quickly if the story changes, which is what I suggest here with SMCI. It's impossible to ignore what they accomplished over the past year and it portends more of the same going forward. I can't chase it any more than I have already as I missed in in the $100s when the story first crossed my research. But if there's one thing I've learned, just like when I missed TSLA in the $30s because I wanted it $1 cheaper, it's that good models into good environments have legs.
The laws of big numbers will catch up with all the runners but that doesn't mean they don't represent stellar value if they aren't carrying an extremely rich forward valuation and it sure seems as if that may be the case with SMCI and NVDA right now. Looks like it has another few legs to go.
My favorite way to play stocks like these are via Calls, covered calls and using gains to build long positions, or via the sale of puts to establish a position.
Thanks for your input
J |
