Monday, August 7, 2017
Let's take a look at something I find fascinating. I love studying historical patterns and then watching very similar structures play out over and over across many different time periods. Take for example this little trio here:
1986 - 1989
2006 - 2011
2009 - 2017
Now let's see what happened next:
1990 - 2000
2012 - 2017
2017 - ?
Will this follow in the footsteps and rhyme like the others? Ultimately we don't know. Fortunately we don't have to know. All we need to do is be sure to manage our risk and let it play out. I'll tell you this, if it does turn into a similar outcome I better be participating when it happens.
How easy would it be to just say "oh this stuff is all completely random and this stock is too high. Its probably going to crash and fall apart". But what if it doesn't? Imagine being the guy in 2011 that said MA doesn't have a chance to play out in a similar way as MSFT did in the 90's, "its probably going to tank".
Granted MA hasn't had the same percentage run that MSFT did, but the outcome of the pattern was similar in that both experienced tremendous expansion. Also note that MSFT's run lasted 10-years and MA is only 5-years into its move at our current time.
So now we ask, can MDSO do it too?
Why not, is my question? Why can't it? Because the market is up too much? Didn't people say that in 1995 and again in 2013? Why is this time any different? Why can't a medical cloud computing company growing EPS Q/Q +60% and Sales Q/Q +20% participate in a similar uptrend?
I'm willing to give it a chance (disclosure I am Long MDSO from February '17 at $56/share)