Next year's long/short experiment: Last year, I had the simple premise that a long large cap SW basket would significantly outperform an industrial basket given the relative valuation dislocation. See: This year, lets up the ante. There is a number of ex-growth software and internet players who have seen multiple compression levels that are cheap by any measure. I would surmise that the market is ultimately proven wrong in the growth prospects of several. I also suspect that the market is also p
Dec. 1, 2023, 12:48 a.m.
Expensify is too damn cheap: Crowded space, undifferentiated, tough macro, point solution that will get murdered, CEO is a nutcase snowflake. Yep, those are all probably true to some extent. After all, you don’t go dip below <3x forward when things are going well. But lets talk about some of the positive aspects:
June 15, 2023, 8:42 p.m.
More Thoughts on the Long Large Cap SW / Short Industrial Trade: The valuation gap between large cap software and industrials has been evident for awhile now and only recently began to close a bit. Below is a snapshot of the divergence. This is just a templated run so im sure some figures are not perfect but is directionally accurate.
Dec. 17, 2022, 7:57 p.m.
Some Predictions for 2023: 90% of these are likely wrong, or too early, but it why not? Best-of-Breed in the $2-10B range continues to consolidate in PE land. Thanks for reading DB Software Musings! Subscribe for free to receive new posts and support my work. Contrary to last cycle when these companies ended up with the Oracle, SAP, Salesforce, I believe the only home for majority of best of breed is now private equity. Reason is simple, these companies rely on their neutrality to thrive and hav
Dec. 13, 2022, 1:33 a.m.
The Oracle Re-Rating Story: In my (future) posts, I plan to skip over the basics and assume my readers are intelligent enough to pull up basic filings. However, a brief history of the company evolution would help set some context. Oracle has transformed itself several times since it was founded about 50 years ago (and uniquely so). It started as a relational database business, then began building enterprise applications such as e-business suite. What followed was a period of rapid consolidation
Dec. 6, 2022, 11:46 p.m.
