Tech Stocks Crashing? – I See Opportunity!
Hey guys! Jonathan here 😉
So I’m ‘interrupting’ some of our planned posts to share this one – because a market dip is always an opportunity that I don’t want you guys to miss out on.
For those of you who prefer reading, this is the companion write-up to my YouTube video here.
Welcome back to the favourite place of Growth Investors and aspiring full-time investors!
In order to not make my posts repetitive, I’m going to delve right in to the details.
For new readers, or if you need a quick refresher on CRWD, a Tech stock I’ve covered previously, click below for more details.
[RELATED: Four Lessons from Crowdstrike That Will Improve Your Portfolio]
Let’s not sugarcoat it – Tech stock prices are dropping
So at the time of writing (March 2021), tech stocks are down again.
One of our favorite tech companies, Crowdstrike (NASDAQ:CRWD), fell 49.55% since the start of Mar.
So people ask how I stay calm when my six-figure profits ‘disappear’ over the downturn.
Using CRWD as an example, let me share a couple of insights about my thought process when stock prices are falling.
Here’s a peek into Jonathan’s Mind!
#1 – Crowdstrike’s Q4 Results Were Released On 16 March.
After analysing the Q4 results, I personally think Crowdstrike will continue to grow well.
[RELATED: Is It Time To Sell Crowdstrike Now?]
Why?
Thanks to COVID-19, companies need to find a way to conduct their businesses remotely to survive. Everyone is moving to the cloud.
But yet, many companies do not currently have the capabilities to protect their assets on the cloud.
This is where Crowdstrike is positioned to meet this urgent, high demand for cloud security. This is the opportunity Crowdstrike has prepared many years for!
#2 – I Highly Doubt Cybersecurity Solutions Will ‘Go Away’ When Covid Stops Bugging Us
Ever since the Solarwinds hack, more companies are treating cybersecurity more seriously. If you are wondering about the Solarwinds saga, watch my video here.
In today’s world, cybersecurity is more critical than ever. Hacker threats are real. Companies need to keep ever more sophisticated hackers at bay.
Ask yourself: As a CEO, would I rather spend on good quality cybersecurity, or risk being hacked, pay huge fines, and sacrifice my company’s reputation?
#3 – Cybersecurity Spending Is Still Low On Company P&Ls, Which Means These Are Still ‘Early Days’.
Crowdstrike’s market research statistics currently show companies are only spending 1.1% of their total cloud budget on cloud security.
Looking ahead to the coming years, clearly, the total addressable market for Crowdstrike is huge.
Bearing in mind these three factors: THINK ABOUT IT AGAIN. ASK THE RIGHT QUESTIONS!
Many people are so swayed by falling stock prices, they forget that they are buying a business.
Summary
When Crowdstrike’s stock price fell, these are the first three questions I asked:
Does a 24% decrease in share price mean Crowdstrike will stop its business today?
Answer: No way. Did you know Crowdstrike is blocking 4 trillion threats weekly??
Does a 24% decrease mean Crowdstrike stops improving?
Again, NO! Just earlier this month, Crowdstrike made enhancements to their Falcon platform.
Question 3: Does a 24% decrease mean Crowdstrike stops growing?
Answer: Another clear NO. Crowdstrike acquired Humio (a company previously growing at 500% before it was acquired).
After answering these questions, I am quite certain Crowdstrike’s business fundamentals are completely intact.
Whenever I see negative news in the market, I ask these questions to cut to the chase and discern if there is real cause for concern.
TO CONCLUDE – In investing, for peace of mind, we must do our homework.
I know buying stocks on the decline sounds counterintuitive, and it goes against our instincts.
I totally understand that if you are new to investing, this is one very scary situation.
Wall Street is shouting for investors to sell. Blood is being shed on the streets, fear is rampant.
And it can really feel like your hard-earned money is evaporating.
After going through those key questions, I hope that you feel more reassured.
As long as you buy a high-quality company, you are safe.
In fact, I see a sell-off as a fantastic sale – just like people rushing into Walmart on Black Friday when everything is selling super cheap!
Rather than selling out of fear (and at a loss), this is the best time to build your position!
My Actions: Diamond Hands + Adding More
As of March 2021, I am still holding on to Crowdstrike and I don’t plan to exit over the next five years.
In fact, I am planning to buy more Crowdstrike at $180 per share.
This is not investment advice. Be smart, make your own decisions, and remember you need to understand what you are getting yourself into.
Take responsibility for your decisions and actions.
I know what I will be doing if a recession hits and Crowdstrike falls 50% to $90!
Yes, I am so confident that, assuming Crowdstrike’s fundamentals don’t change, I would gladly average down at $90 per share.
With this, I hope by you realise the importance of doing your homework, understanding what you are buying, and what makes you confident of your stock selections.
Without a proper understanding, you will not have the calm confidence to get through the volatility of the market.
We aim to have Diamond Hands, not Paper Hands! This separates an investor (who does his homework) from a gambler (who doesn’t).
A person who puts in the work will find that it pays off because they understand what they are buying, why it grows, and their portfolio will grow thanks to their research and good decisions.
Remember: How you make 20% on $1,000 today is how you will make 20% on $10 million. The strategy doesn’t change.
Understanding what you are buying and having a long term mindset doesn’t just apply to Crowdstrike. It applies to every stock you buy.
It’s now my turn to ask you this – What’s going change for you when the next market correction hits?
If this article has increased your learning today, share this with like-minded friends! Together we can put more investors into more households.
I’ll sign off with my usual reminder to say no to lousy companies – only buy the best growth companies in the world!
Note Of Caution:
Recently, while replying to comments on my youtube channel, I spotted a copycat “Invest with jang”.
Don’t worry, they’re history now.
You guys are smart and know that I would never write scammy messages (e.g. asking you to add my mobile number).
Also, thanks to those of you also alerted me about this imposter out of concern for our community. ❤️
They say imitation is the highest form of flattery… Nice try there, fake “Invest with jang”.
So how to tell if it’s the REAL Jang, vs impostors? Two very simple ways:
- Replies or comments by the real Jang are highlighted with a gray background. If it’s not highlighted in gray, it’s fake!
- The real Jang only invests in the best growth companies in the world 😉
- And last but not least, we will never give buying recommendations. DYODD!
Invest safe!