Key insights
- The post discusses the challenge of identifying promising stocks early and maintaining conviction. The author highlights a successful early investment in ONDS, driven by a low price-to-sales ratio, but notes subsequent dilution issues. The author also regrets missing gains in optical modules and memory stocks. This reflects the inherent risks of small-cap investing and the difficulty of timing sector rotations, suggesting a slightly bearish sentiment for speculative growth stocks.
Last August, I watched some YouTubers talking about drones, and they mentioned AVAV, RCAT, ONDS, and others. Among them, ONDS had the smallest market cap and the lowest price-to-sales ratio, and its stock price was only around $3 at the time, so I bought a small position. Later, when I checked my holdings, I realized it had kept going up, and it even reached $15 at the beginning of this year. But because the company kept doing acquisitions and diluting shareholders, the stock has been falling ever since, even though the fundamentals still seem pretty solid.
Now I’ve also noticed that optical modules and memory stocks have done very well this year, but I missed that move too.
So I want to ask: how do you guys spot these high-quality sectors and stocks early, and have the conviction to put a meaningful portion of your portfolio into them? Was it because you came across some really strong DD? And do you have any YouTube channels or X accounts you’d recommend that focus on finding high-quality stocks early?