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Asked 3w ago
If you really want to invest in Snowflake, I'd suggest to do proper portfolio allocation - this is to protect your downside.
e.g. 80% in 4-5 companies that you've strong conviction. 20% in 4-5 companies that you want to be part of their growth story but maybe riskier.
Being an investor can sometimes be like a venture capitalist. You'll need to deep dive into the quanlitative (esp. the management), not just the quantitative metrics.
Personally, I'd prefer a founder-led company. Not just having skin in the game, but they're also emotionally attached to their strong conviction of establishing the company.
The thing about IPO is that the rich people have the privelage of buying the stock way earlier before it is officially listed in the stock market.
Meaning to say they bought in at a way way cheaper valuation than normal investors like us.
As soon as the company goes public, we would already have been too later to enter because those rich people came in and invest earlier than us.
IPO stocks are extremely volatile stock because company profile is insufficient for us to analyze.
Of course you would argue what if this is the next amazon , what if this is the next facebook?
Well my friend, that is like finding a needle in a haystack.
In summary I would buy it but no more than 5% of my portfolio!
The upcoming Snowflake IPO is the most anticipated tech IPO of the year. Investors should decide in advance how much are they willing to pay as Snowflake will definitely test the upper limits of what it means to have a stretched valuation. The company has definitely attracted a ton of attention after Berkshire Hathaway announced that it will take part in the IPO as well. Today, I attempt to breakdown Snowflake as a company to help you better understand all that you need to know before investing in them.