Thanks for another wonderful article. You write very well, have insightfully integrated views on things, and are very productive. Glad to see your business is growing per your 2019 business update post – you have about as scaleable business as they come – you could 10x subs at zero marginal cost/marginal effort. I think you have a very decent chance of doing just that if you keep up your great work. Rome wasn’t built in a day. For the first year after I established my blog I had barely any views at all.
In terms of the bottom line though about whether SHOP is a buy/hold/sell, the second half of your third-to-last paragraph says it all IMO: that is the very definition of a stock that has the opposite of a margin of safety. Margin of safety exists with out of favour stock/stock subject to uncertainty where you can use all sorts of negative assumptions and still justify the current price. SHOP is the exact opposite – you have to assume everything goes right for a long time just to get 9%. That’s the very definition of ‘priced to perfection’.
That doesn’t mean we can be 100% sure they won’t do even better, but investing is a question of probabilities not certainties, and how far you have to ‘stretch’ your assumptions to justify the price. I conceptualise stock valuations as a sort of superpositional bell curve of possibility (although with fat tails), and it’s not so much a question of whether the stock currently sits somewhere that is not on the bell curve (it almost always is), but whether its sitting more to the left or more to the right, so to speak. SHOP is already pushing well into the right hand tails imo at current prices.
Thanks again for your work. I recently discovered your work and am sharing the cost of a subscription with a friend as a trial, but I will switch to a direct subscription when we roll over as I’m getting a lot of value out of your work and want to support the site. I’ll give you a plug on Twitter also as you deserve wider circulation.
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