SAAS is the Only Sector in Tech You Should Be Focused On

I don’t know how best to communicate this to you, other than to strongly advise that you look at nothing else but SAAS stocks. For a while, I was a skeptic too, unfamiliar with the business process and how these companies continued to grow, seemingly unabated, without even a semblance of free cash flow generation. But, after maybe 100+ hours of intense research, listening to countless lectures and podcasts and reading reports and articles, I can comfortably say that SAAS is the single best industry to invest in since the invention of the internet (marks top in SAAS now).

Stop thinking about SAAS as tech and instead view them as the best sales teams in America armed with NSA grade spying data that is used to hack the human mind and grow sales. They know what you’re doing at all times and they’re watching you, ever so creepily.

They understand what colors appeal to you best, how to write an email to a prospect, and what verbiage to use to get you to take a free trial (BTW: Exodus is doing free trials). Once you’re in the free trial and have expanded their sales funnel, they know how to onboard you to convince you to subscribe. Once you’ve subscribed, using advanced software, which is also SAAS, they’re monitoring you closely to make sure you’re getting maximum value out of the product. If your behavior changes, one of their customer success reps will immediately contact you, in an effort to prevent churn. After you’ve been a happy customer for a period of time, they up-sell and cross-sell you into various services, in order to increase their MRR (monthly recurring revenues), and to help you grow your business using their software.

This subscription model is used by all of the best companies in the world, from Amazon to Netflix, down to companies you’ve never heard of. But they’re growing very fast, hiring a ton of people, and have been backed by the very best VCs in America.

Right now a good SAAS company, growing at 10% per month, with churn less than 3% per annum, fetches 30x sales. In order to become a unicorn, all you need is ~$30 in sales. Is that nuts? Maybe, maybe not.

The sales process and revenue projections at the top SAAS companies are, by definition, predictable because they are repeatable. They know how much revenues each sales rep will generate and they know how long it takes to train each rep to become successful. They understand that by investing ~$1m in the business can product $10m in sales, inside 18 months.

I can go on for another thousand words discussing how well positioned these companies are in today’s enterprise migration cycle. However fantastic their prospects are, there will be downticks and panics, so be mindful of that. These companies are premium valuations because smart money owns them in size and expectations are very high. Should they falter, the subsequent drops will be heinous.

This is what we’re looking for in a SAAS company, in terms of repeatable and consistent revenue growth.

And here is a fantastic data dump by Keybanc, explaining why this sector is to be owned — briefly glossing over the fact that enterprise (big business) is in the process of a great cloud migration and how the second decade in SAAS should create vast amounts of wealth, as the industry goes mainstream. Remember, big business wants to help their sales people be more successful and they want to streamline their IT projects, and reduce costs if possible, by outsourcing by subscription to software that costs a fraction of what it might cost for them to create internally.

My advice to young kids coming out of college who are unsure what to do with themselves: become a software salesman.

Want to know more about SAAS? Listen to the CMO of MongoDB describe their process.

David Skok

Jason Lemkin

Enjoy your Saturday.

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Coming from someone who’s walked the black dog for much of his adult life, I know first hand what it’s like to grow a beard and dive into melancholy. As a matter of fact, I’m growing a beard now. I used to lash out in fits of unbridled rage, get into arguments with people, and remain in a constant state of disappointment with people — because they didn’t live up to my expectations.

The idea behind being disappointed in someone, or upset, is predicated on the notion that he/she had a choice and made decided to make a bad one.

(ADJUSTS MICROPHONE) WRONG.

See lads, people do not have free will or choice. Let me explain.

If I woke up one morning and said “I want to be a fucking brain surgeon” and set out to do it — in a thousand years, I could never become a brain surgeon. On the flip side, if I was tasked with creating an investment stratagem or to write a fantastic book or short story, I could do it with ease — whilst the brain surgeon, who is very competent and smart and talented, couldn’t invest his own money or write an interesting paragraph if his fucking life depended on it.

Your genes, the DNA coursing thru your veins, makes you who you are. Your bloodline determined your proclivities and intelligence before you were born. That’s all there is to it.

If your grandfather and father were thieves and mountebanks — you are not to be trusted. Conversely, if you have a history of brilliance in your bloodline, you have a great chance of being highly intelligent too. Naturally, intelligence doesn’t mean you’ll get rich. There are other factors that determine a person’s drive, such as grit and perseverance — the ability to accept defeat and advice.

If a person is programmed, literally programmed, to make mistakes, acting like a complete asshole, lazy, weak, or incredibly obstinate, think back to this post and all of the macro-data that supports this assertion — knowing full well that people do not have a choice, and find solace in knowing that’s just the way it is.

Interestingly enough, if your bloodline is permeated with passivity, people who regularly accepted shit and ate it, that might explain why you’re such a damned pushover. Half the battle is becoming aware.

Nowadays, I cavort and sashay thru life, viewing people behaving badly, and I smile at the spectacle — because I know an ape is an ape and that’s all there is to it. Instead of getting mad, I feed them bananas.

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I realize the previous post displayed Voldemort and my intent to place on my SOXS — betting on the death of NVDA. While all of that still stands, I still have a proclivity to buy stocks that look good and that are heading higher.

I bought some BAND this morning — based on the MUH charts.

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This is a very important message.

Shares of NVDA are dead now. The crypto racket is over and now the shares will proceed lower.

Look, look, look.

One way to alleviate the carnage from your portfolios is to put some SOXS on — triple inverse, FUCK THE SEMIS, ETF.

I bought some of that shit today — hoping for a final ending to occur in the semis.

In other news, I sold COHR for a 5% loss and ZS for a 5% gain. I am circle jerking.

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Matt Drudge must be short TSLA. There have been numerous stories highlighting Musk’s erratic behavior, none have had the effect this Drudge headline has had, thus far. Shares are off by 7%, due to Drudge linking this story, which showcased Musk’s batshit brain activity.

If you want the full rundown, the lads at Zerohedge have it. They’re truly obsessed with Tesla and won’t cease until the shares hit zero.

In other news, yes, Exodus did nail the Tesla overbought. I am certain 99% of you were wondering about that. Here, look at the call. None of you have precision like this — you’re like meandering retards in the jungle with dull machetes.

UPDATE: Drudge updated his headline.

And again…

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Clearly I cannot kill myself now or quit blogging, as promised — I am too sad. I have very strict rules when it comes to drinking or quitting blogging and I never do them while sad. If sad, drink coffee.

The President tweeted this morning he was cancelling the great big beautiful military parade — due to evil price gouging DC politicians. Cleary, the deep state doesn’t want us to look at our killing machines — because we might want to keep them all here and not send them overseas to wage beautiful wars.

The local politicians who run Washington, D.C. (poorly) know a windfall when they see it. When asked to give us a price for holding a great celebratory military parade, they wanted a number so ridiculously high that I cancelled it. Never let someone hold you up! I will instead…

— Donald J. Trump (@realDonaldTrump) August 17, 2018

….attend the big parade already scheduled at Andrews Air Force Base on a different date, & go to the Paris parade, celebrating the end of the War, on November 11th. Maybe we will do something next year in D.C. when the cost comes WAY DOWN. Now we can buy some more jet fighters!

— Donald J. Trump (@realDonaldTrump) August 17, 2018

I haven’t even looked at my stocks today. Seriously people, I am so distressed over this abrupt cancellation — I am without words. What’s the big deal anyway? The parade is only going to cost $100 million. Hell, the economy is growing at 4% and all of the jobs came back from China. Black and latino unemployment is at record lows and Mexico is paying for a long boy southern wall, in order to keep their drugs out of our lovely cities. I had planned to bring the kids down to DC and show them our tanks and missiles, whilst explaining to them how American death machines bring peace around the world and instill order — just how George Washington intended. Now the only thing they’ll get to see are those filthy homeless bums shitting in the DC streets when we visit.

SAD.

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Here it is gents. This is the moment you’ve all bee waiting for — you jog on motherfuckers always hating on Le Fly — hoping that he’d die inside a fire or drown inside a lake. I will make it easy for you right now.

If PDD doesn’t run higher tomorrow, I’ll quit the blog and never possibly drown myself in a lake.

Call me Beijing Fly, ball-jugglers.

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The franchise has been defended. They beat down and defeated a very evil and parasitic enterprise known to you as Moviepass.

With them out of the way and Hollywood readying for their best films of the year, AMC is poised to more gains. Valuation is cheap and Exodus is flagging it overbought, with excellent statistics pointing to further gains.

It is a momentum indicator, one that is being closely examined and might soon by front and center of my swing trading workflow.

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If there was ever a state that deserved food poisoning, it would be Ohio. As far as I’m concerned, Chipotle is doing us a public service by sickening the people of Ohio — making them weaker so they could expire faster. An ideal country would be people on the coast and no one else in the middle. Actually, we could keep our trash and food there, maybe mix up the two in order to be efficient and green. Right now we only keep our human trash in the middle; but eventually all of those people will either die off by shooting each other, or they’ll need to move due to lack of jobs.

When the come to the coast, us Northerners can give them sales gigs, teach them to ditch their hokey accents and give up on the idea that they were ever the ‘heartland’ of America. Truth be told, America started with 13 colonies. If there is a heartland — it’s here, in the Northeast corridor where the weather is brisk and the people are smart.

Back to CMG:

Chipotle Mexican Grill said tests confirmed bacteria caused a recent outbreak of illness at an Ohio restaurant that sickened hundreds.

Clostridium perfringens was named the culprit, tests from the Centers for Disease Control and Prevention confirmed. Leaving food out at unsafe temperatures causes the foodborne disease.

Chipotle said a specific food has not been identified as a source. CEO Brian Niccol said leadership will retrain all restaurant employees about food safety and wellness protocols nationwide starting next week.

Health staff identified 647 people who said they experienced gastrointestinal symptoms after eating at the Chipotle on Sawmill Parkway between July 26 and July 30.

On this news, stock is barely changed and up terrifically for the year.

This is America.

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This is so easy, even a retard can do it.

Enter MOMO — piece of shit Chinese burrito with nefarious background. The stock is a meme, so I bought it because I like to make money.

Defined stop at $35. It doesn’t get more text book than this. If I lose money on this trade — I’ll cut my cock off.

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