#23: F5 Networks’ Transformation, Or What Makes A Compelling Growth (Or Value?) Pitch

We flip the script. Daniel pitches Akram on a new idea - f5 Networks - and Akram plays the role of portfolio manager, hearing out and testing the thesis. While Daniel might hope you like the idea itself, this episode should be a little more educational, as we break down what makes it a good or not-so good pitch, what's missing, and what could go into the thesis next. It also highlights a lot of the challenges in both growth and value investing.

We do get into other ideas, including Dropbox, and into the state of the market and whether the Alteryx report is a warning sign.

Topics Covered

• 3:30 minute mark - What brought us to f5?
• 6:30 - The long case for F5
• 10:30 - How the ADC market used to size up 7:00
• 13:45 – The inflection point for f5
• 16:00 – What is the future of the ADC
• 21:00 – What is the competition
• 24:30 The nature of service revenues
• 28:30 – What is it exactly that f5 does here
• 33:00 – Revisiting value and what does a low multiple mean, and the Alteryx report
• 39:00 – When the numbers aren’t enough
• 42:45 – The research process
• 47:30 – The limits of value investing
• 49:30 – Dropbox as another example
• 55:30 – Growth vs. value, or story vs. numbers
• 59:30 – Studying Tesla
• 1:04:30 – Alteryx – exception or warning?
• 1:10:45 – The hunt for the coming inflection
• 1:15:30 – Covid-19 Bull market geniuses and the market climate
• 1:22:30 – IPOs vs. SPACs and what that says about where we are

Reading materials:

Full pitch on Seeking Alpha: https://seekingalpha.com/article/4369321

What Makes Stocks Go Up: https://dubra.substack.com/p/the-anatomy-of-stocks-that-go-up

Life Magazine - "New Kid On The Street" (scroll to 62a):  https://books.google.es/books?id=bU8EAAAAMBAJ&printsec=frontcover&hl=es&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false

Dropbox: The First Dead Decacorn - https://alexdanco.com/2015/08/24/dropbox-the-first-dead-decacorn/