Daily Digest: RDFN, PD, CRWD, ZM Blogs

The most important company-related news in 5 minutes a day

September 04, 2020

Hey everyone, these updates will be mostly company focused. There’s enough macro information and predictions out there. For the most part, I’m not in that game (unless things get way out of whack..see below).

What I want to use this newsletter for is to update readers on the 5 or so company-related headlines I feel are most important each day. Hopefully, this provides value and saves you time.

I’ll also provide links to other non-company related resources at the end.

The status of my portfolio & recent moves

We’ve seen some volatility in the markets this week. I believe this was healthy. Things were getting a bit reckless. After Zoom announced stellar earnings on Monday and EVERYTHING rocketed on Tuesday, I made the move to move 25% of my portfolio to cash and began diversifying away from being heavily weighted in ~10 companies. I was transitioning to owning around 25 companies because I wanted to diversify away from only owning companies that are great companies, but that had what I believed reached unsustainable levels.

I’m not sharing this to take a victory lap or say “I told you so.” I’m sharing because at my core, I’m a long-term buy and hold investor. In January I felt like COVID was going to be a big deal and I quickly moved to about 50% cash, but then let FOMO get the best of my and reinvested. Everything ended up recovering, but I felt COVID was our “Black Swan” event and for a short time… it was.

After Zoom reported and everything rocketed, it was the last sign I needed that things were just excessive. Apple and Tesla surging after announcing stock splits (which add absolutely no value) were the things that started to make me uncomfortable.

So even though I’m a long-term investor, I made that decision. It felt very taboo, but it was what was going to allow me to sleep best and it aligned with my family’s goals.

So now, after a 10% - 30% drop in some of my favorite companies, I’ve invested about 50% of the cash I raised and will add more as I see fit.

But you shouldn’t do what I do. You have to do what makes you most comfortable as an investor based on your own experience and situation.

Also, it’s very, very, very hard to time the market with any level of consistent success. Even though my hunch was right in January, I didn’t execute well and ended up doing more harm than good. This time it worked out, but could have just was easily not worked.

So again, do what’s best for you… and I’m personally trying to default to a MOSTLY very long-term buy and hold, with occasional spirts of activity when things feel way out of line.

I’m also not going to be sharing my personal portfolio here. I share my best idea each month in our 7investing service. My performance is tracked with each recommendation and I will recommend selling if something thesis breaking happens to one of my companies, but other than that it’s long-term buy and hold and I’m very confident my recommendations will continue outperforming…even with this volatility.

I will always be buying my latest recommendation with my monthly contributions the day after our recommendations come out.

Here is how my recommendations are performing…even after this sell-off

Company Blogs:

Redfin (RDFN)

Nationwide, 54.5% of Redfin offers on homes faced competition in August. Though that’s down from a revised rate of 57.3% in July, it’s the fourth month in a row that more than half of Redfin offers encountered bidding wars.

An offer is considered part of a bidding war if a Redfin agent reported it received at least one competing bid.

The housing market continues to be a bright spot in an uncertain economy during the coronavirus pandemic, with historically low mortgage rates (the average 30-year fixed rate was 2.91% the week ending August 27) and a shortage of homes for sale driving buyers to compete for homes.

Pager Duty (PD)

In the U.S., online retail sales are expected to grow 18% in 2020, driven by an increasing number of digital buyers and a rise in average spending. There are also new consumers shopping online for the first time, with a 12.2% growth in online shoppers aged 65 or older. It’s a similar story in the UK, where the Office for National Statistics revealed a 50% increase in online salesin July 2020 compared to pre-lockdown levels in February 2020.

Additionally, click-and-collect and curbside pickup services have seen huge uptake in 2020. In the U.S., sales from click-and-collect orders are forecast to total $58bnthis year, significantly higher than previous forecasts. In the UK, a study from grocery retailer Waitrose found that 77% of consumers are now doing part of their grocery shopping online, up from 61% in 2019.

With the same study finding that 19% of people will use a wider variety of online services post-lockdown, including home delivery and click-and-collect, it’s likely that this trend will persist and experience long-term growth post-pandemic.

CrowdStrike (CRWD)

Cybercriminal groups vary widely in size and technical prowess, but those that can cause the most extensive damage to businesses fall into two categories — eCriminals and nation-states. eCriminals are often interested in financial gain while nation-state actors tend to take a longer and more targeted approach to gain access to intellectual property from within distinct industries, including companies operating in the telecommunications, financial and healthcare sectors.

Of all the types of cyberthreat activity across the region, it is eCrime that has seen a rapid increase since the virus first appeared earlier this year. Indeed, the CrowdStrike Threat Intelligence team has seen an increase in eCrime up over 330% since the start of the year versus in 2019.

Zoom (ZM)

A few reasons Radisson Hotel Group is betting on this hybrid format for corporate events of the future:

In North America alone, just one of our five regions, OneSchool had over 22,613,997 meeting minutes in the last year, with over 930,376 participant sessions. These numbers significantly increased following COVID-19 as we moved to completely online learning across K-12 globally. We needed a simple, consistent platform that has the right amount of functionality and is as safe and secure as possible for our students. We needed a platform rich in tools to help drive engagement, and Zoom delivered that in spades.

Other Resources

Their most recent episode “A System Shock to the Real Estate Economy” was very thought-provoking. There are still a lot of unknowns about how the second and third-order effects will play out over the longer term with the pandemic.

This is a fascinating thread on how the Univeristy of Arizona is trying to handle their reopening.

That’s it for today. Enjoy your day.

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