Don't Let a Screenshot Become Your Investment Thes
This is one of the problems with investing on social media.
Someone posts:
$SOFI → $50
$CRWV → $250
$CRDO → $320
$APP → $800
And suddenly those numbers are stuck in everyone's head.
But where did they come from?
That's the part I care about.
What revenue growth is being assumed?
What margins?
What free cash flow?
What valuation multiple?
How much dilution?
What happens if growth slows?
And how long is the thesis supposed to take?
A price target without those assumptions is just a number.
I don't want my investment thesis to be:
“Someone on X thinks this stock will hit $300.”
I'd rather say:
“I think the business can generate X amount of earnings or cash flow, and at this valuation I believe the market could reasonably price it around Y.”
Now we have something we can actually debate.
That's investing.
