CRWD: Was doing some extra reading and pondering on the tech issue and CRWD. One of my rules for taking new positions is to always understand what the goal is for the trade. Is it a position trade? Long? Short ... intermediate term? As a core long term holding, typically that means my outlook is for 5 years. When I take positions with that term, it is done so knowing that I will build it for a period of time and not looking to trade in and out of it based on performance. As with all my positions, I tend to review their performance, weight in my portfolio, etc. often.
With those labeled as long term holds, the one thing I am always on the lookout for is: "Has the story changed?" Through this evaluation, it allows me to take an objective point in time look at the holdings to make sure the narrative, execution, story remain intact. This tactic has saved me from many big declines but not all (ROKU, UA) that I was slow to recognize or act on.
With CRWD, I don't have enough data to exit the position yet but I am asking myself that question if the story has changed enough to warrant an exit. If it were just a tech glitch/occurrence, it's not uncommon and I would expect them to recover within weeks without much impact. With CRWD, however, they are already a high valuation company though with the growth and market presence to justify the cost. Additionally, my cost is in the high $90s. On the other hand, what we don't know is the lawsuits and financial culpability that the company will need to shoulder and, along with incentives and discounts to retain customers, how it will all combine to pressure the already rich valuation, despite the previous growth rate - which is another concern.
I don't have the data yet nor any confidence in anything I've been reading, but I am evaluating as to whether I should just exit and wait or hold on. |
