With Composure

1.Why could I buy software stocks so calmly when they were wrongly sold off, and continue to add to my position a few days before they took off again? Because everything was planned out long ago, so there's no need to overthink, just execute the plan.

2.Composure on stage comes from hard work off stage. The 'now' I wrote about yesterday rose 15%.

3.Of course, the logic behind software stocks benefiting from AI isn't so straightforward; it's more like a second-order logic that requires a bit of deduction.

4.The more AI proliferates, the more enterprises need data governance, identity security, process orchestration, automation platforms, cloud data warehouses, observability, and compliance systems.

5.But the short-term narrative is: AI Agents will replace SaaS. This is simpler, more exciting, so it spreads faster and causes more anxiety.

6.And then, so many people's anxiety overwhelmed their reason.

7.With the big reversal in software stocks, this account of mine has finally squeezed into the top 1%. It's not easy to get into the top 1% without being fully loaded on semiconductors.

8.So, as of yesterday, my trading days for the first half of the year are basically done. Because December and January were mainly for thinking about how to rebalance my portfolio, not trade-driven. So for me, once May is over, the trading days for the first half are over, and June marks the start of the second half.

9.But the annual KPI was completed long ago.

10.Being able to catch the software stocks this time also benefited from portfolio rebalancing. I'll write about portfolio rebalancing in the next post.

11.One last thing to add: this time, AI will cause a divergence in software. The good ones will get better, the bad ones worse. The most dangerous are: software with single functions, low stickiness, charging by seat count, no data moat, and low customer switching costs.

12.Over, everyone have a pleasant weekend.