FROM THE DESK OF PORTER STANSBERRY
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PORTER: Oh boy. All right. Humble pie time. KEITH:
KEITH: Yeah, it was a really good time to give that recommendation.
And it was a company that I was, in fact, using as part of the technology behind a platform that I was building. So, at the time I agreed with you. And you turned out to be correct. The stock took off. Quickly doubling, then tripling. But then what happened? PORTER: Well, unfortunately, a well-known short seller, Andrew Left, who I actually know pretty well. He’s a friendly guy to us. He’s been at our conferences and we’ve done business together. But he released a scathing report about it. He saw it as a short target. Andrew claimed most of Shopify’s sellers were shady promoters looking for quick profits. They weren’t. In any case, though, the stock plunged 12% in one day. That was the biggest one-day drop ever. And it forced us to hit our trailing stop loss. Now, listen, I’m going to be really clear. We didn’t agree fundamentally with Andrew Left at all. But as I said earlier, I always felt that sticking to our stop losses was an important element to managing risk for our entire portfolio and really important to demonstrate how that discipline worked for our subscribers. We made 256% on that recommendation in 18 months. And frankly, I was happy with that. AMY: I’d be happy with that, too. KEITH: It’s a fantastic result. And I agree, Porter... Using a stop- loss strategy is an essential element of any investing approach. At the time, Shopify was still a pretty young and volatile company. Which means its VQ was larger than the 25% stop loss you were using at the time. In fact, the “smart trailing stop” didn’t trigger for another 31 months. In short – that recommendation could’ve returned a 1,042% gain for your
I think this is a good way to illustrate the VQ. This is one of the recommendations you made in Stansberry Research’s flagship newsletter, Stansberry’s Investment Advisory. The stock is Shopify, an e-commerce platform for small businesses.
You recommended it back in April 2016. Do you remember why? PORTER: Of course. We recommended Shopify specifically because Amazon came out with a similar platform and Shopify beat the pants off of them. And they garnered a huge lead in that kind of a business service. There’re all kinds of network effects to that. So, whoever the leader is in that space, they’re going to have all the business. And I knew about it directly because I was using that technology platform for one of my own companies, OneBlade, my razor business. And of course, Shopify allows you to do all kinds of things if you’re selling anything online. It manages all the sales, the marketing, the communications. It integrates into your accounting. It’s a wonderful technology platform. And it helped us strengthen our brand identity at a very affordable price. So, I knew it was a great product. And then, of course, if you look at the stock just from a business perspective, Shopify was having huge revenue growth through its subscription model. And as someone who has built many businesses with subscription models over the years, I understand how sticky all that revenue is going to be. So, I was very bullish on this business.
readers if you had known the stock’s VQ.
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