- If you read our regular work on SA, and you're thinking to maybe try out our SA subscription service - for free! - there are things you need to know.
- The main things we think you need to know are, one, what stuff we do in the pay service, and, two, what stuff we don't do.
- So we present for your Friday morning pretend-to-start-work delectation, All The Stuff Do And Some Stuff We Don't Do.
- Have at it. And here's to at least an early pre-market that's green! (The day is young yet).
DISCLAIMER: This note is intended for US recipients only and in particular is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications.
We try to do things a little differently here at Cestrian Capital Research, Inc. Our pay service has been running a little while now but it has changed a lot in the not-quite-two-years since we started. So we thought we should lay it all out in one place. So that if you are thinking of trying it out (free trials available), you know what to expect. And with those expectations in mind, you can take up a free trial and then decide whether the service is right for you or not.
First up, here's what we do:
We do a whole bunch of work on the stocks that interest us in the space, cloud and defense sectors. Market assessment, fundamental financial assessment, stock chart assessment, a quick look at the ley lines and the runes, figure out whether we like a name or not and if so, as a trade or an investment. Then we publish that work - the best and most timely work for our subscribers, and some peripheral work for our blogs or for articles on the free-ish side of Seeking Alpha. We invest our own personal account money on the basis of the work. Before we place trades in the stocks we cover, we publish a real-time "Trade Alert" which is a disclosure exercise rather than a commandment. If you don't want to be bothered by these alerts, you can turn them off. If for some reason you are fascinated by our every move, leave 'em on. Either way, we want you as a subscriber to know which of our covered stocks we are buying or selling before we buy or sell them, so that if you like the idea, you can trade before we do.
The idea with publishing our work is that it helps you with your own work. We know nothing about your investing style, financial situation, risk appetite, hold period preferences, time available at a broker screen or otherwise, access to specific stocks or markets - we know nothing about our subscribers save in some cases for their emoji preferences and whether they lean meme or not.
And so we don't provide any kind of investment advice, personal or otherwise. What we do provide is the work we've undertaken prior to investing or trading our own money in the stocks we cover. We publish ideas on long term investments, and ideas on short term trades, sometimes in the same stocks. And we hope you find it useful.
There isn't really a name for that thing above so we call it 'proprietary buyside research, published'. Which isn't a very snappy marketing concept but it is at least accurate.
The formal output of this work you will find in notes like this one and also in our 'Stock Central' Google sheet which is an ever-improving standing resource for subscribers covering the stocks that interest us.
We also run an almost-but-not-quite 24/7 chat service and in that chat service you will find folks from all walks of life. Investors, traders, high net worths, money managers, financial professionals, space professionals, technology professionals. And in amongst the chat and the emojis and the occasional meme, you'll find some really useful stuff. We value the chat service hugely, it helps us make better investment decisions for our own money and we hope it does the same for you. The more people join chat, the better it gets. Some just lurk, some are Chatty Cathy, some pipe up only every now and then. Takes all sorts. We have some basic rules for the chatroom - your regular manners and all - which means everybody with manners feels welcome there, nobody gets YELLED AT IN CAPS or stock-shamed, nobody gets offended by someone's off-beam sense of humor. Anyone wants to play by different chat rules, they're free to go. We love Reddit and could spend all day there if we let ourselves. But we don't run Reddit. We run the Four Rules Of Chat.
Oh and finally. We have spent long portions of our waking lives on investing stuff and we do our best to share some of the stuff we have learned with our members. How to spot the opportunities and problems in a company by looking at the balance sheet or cashflow statement (where most people never look!). Translating from moneyspeak to normalspeak. What good looks like in growth vs. margins. Why 'remaining performance obligation' is a gold mine of information in software company SEC reports that again nobody really bothers to read. We won't call this stuff 'investor education' but we will say that we like to spread the word about stuff we know, just as much as we like to learn from our subscribers that bring other skills and knowledge to the table. (One of our IT professional members has made a couple brilliant calls on cybersecurity stocks for instance - a few days before the market woke up to them, because they're on the ground working with these products).
Now for what we don't do.
We don't do sellside research. By sellside research we mean the type of work produced by your local friendly investment bank; eg. Goldman Sachs & Morgan Stanley at the tier-1 level, eg. Wedbush or Jefferies at the niche level. Many of these firms do some fine work but it is different work to us. Classical sellside research involves producing reports with price targets, earnings forecasts, and rolling those numbers into the Bloomberg et al machines in order to produce something called 'consensus'. Which the company in question then strives to beat, in order for the stock to be lauded come earnings time; whereupon the company will guide cautiously if they have any sense, sellside reports will reflect caution plus a touch, and hopefully the company beats that next quarter too. These research providers are important because if a Goldman says, wow great stock, the stock tends to go up, and the converse is also true. They are also important because they ask formal questions on set-piece earnings calls and although the questions are often bland or inane, the tone adopted by the analysts and the company in response often speaks volumes. Generally speaking on earnings calls right now, the first 30 minutes is the company talking itself up - they all seem to have had the same PR advice which is to big yourself up To Da Moon - and the next 30 is the interesting part, the Q&A. Companies can not give non-public information on those calls so the actual answers are usually a lot less interesting than the tone. But we digress. We don't do this sellside stuff. We don't try to guess next quarter's earnings - we don't care at all about EPS in fact - and we don't join earnings calls save in lurk mode like everybody else.
We don't do model portfolios. A model portfolio service runs like this: in our model portfolio we are buying stock x with a y% allocation. We are selling half or all or whatever of our holding in stock b. There are some very fine model portfolio services around, including some here on Seeking Alpha. The good part is that if the service can show a great historic track record, and the risk/reward balance they offer matches your own, you can trade along with them, maybe pick and choose, and try to replicate their performance, exceed it if you can. Nothing wrong with this. We ourselves subscribe to a couple such services, mainly in stocks or sectors we don't ourselves understand, but to which we want some exposure. So it can work. But this isn't what we do.
We don't do long-term price targets. We have three baskets of long term ideas, divided by sector; (1) cloud software & services, (2) cybersecurity and (3) space. They reflect what our personal account investing interests and time horizons. With (1) we're looking ten years out, (2), three years out, (3) not sure yet but probably longer not shorter. What Cloudflare or Rocket Lab stock might be priced at in a decade's time is absolutely anyone's guess. We haven't a Scooby's. In these long term ideas we're trying to find companies that are outperforming - that's the fundamental analysis - and stock charts showing the promise of forward growth - that's the chart analysis. We don't mind if the stock goes down for a little while if we still believe the long term story. These long term ideas are slow burn, not fast-twitch. We hope that the names we pick can compound up value over the years we hold them.
We don't do specific buy and sell instructions in short term trades. We are partial to chasing a little free money every now and then and we like to use charts as the tool to do so. We publish these chart ideas too. We lay out how we see the stock chart and where we see levels of support, resistance, etc. How you might choose to act on that chart is a very personal matter. Ignore it, go small, go big, use stop losses and limit orders, fly by the seat of your pants, we don't know. It's your money you are looking after and how you want to play it, only you can know. You'll always get those Trade Alerts when we act on our own trading ideas but again, these are disclosure alerts not instructions. Again, turn them off if you don't want to be disturbed from your actual work.
There's also a whole bunch of other stuff we don't do, but those are the main things that we could do but don't.
Finally, if you do take that free trial with us, we hope you like it and decide to stick around. We have a ball running the service and we want you to enjoy it too!
What more is there to say? Check our reviews; and sign up for a free two week trial. Like it? Great, stick around. Don't like it? No worries, you can walk within those two weeks anytime, no backward glance.
You can learn more here.
Cestrian Capital Research, Inc - 26 March 2021.
Analyst's Disclosure: I am/we are long NET, VACQU, VACQW.
Cestrian Capital Research, Inc staff personal account(s) hold long position(s) in NET, VACQU and VACQW together with many other stocks we cover which are not mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.