Motley Fool Money – "Buy High, Buy Higher"

Date: September 2, 2025
Host: Rick Menars
Guests: Jason Hall, Tim Byers

Episode Overview

In this episode, the Motley Fool Money team dives into the concept: "Buy High, Buy Higher," challenging the classic advice of "buy low, sell high." The analysts discuss how strong companies can remain quality investments even after big price run-ups. They analyze recent results from MongoDB, unpack CrowdStrike's post-outage comeback and its competitive dynamics with SentinelOne, and try out an improvisational investing game to explore bullish and bearish cases for Mercado Libre, Duolingo, and Warby Parker.

Key Discussion Points & Insights

1. MongoDB: Is It Too Late to Buy the Winner?

[00:00 - 05:19]

• MongoDB’s Strong Q2 Results:

  • Shares surged 44% after earnings.
  • Revenue from cloud-based Atlas grew 29%.
  • Added 2,800 net new customers—setting a record for the second quarter in a row.

• Improving Unit Economics:

  • Revenue up 24%, operating expenses up “only” 15%.
  • Cash flow return on investment grew to 8.96% (from 5.26% Y/Y).
  • Still below cost of capital but moving positively.

• Short Squeeze Dynamics:

  • 6% short interest before earnings.
  • Short covering contributed to the stock’s jump, not just bullish buying.

• Long-Term View:

  • Volatility expected in coming months.
  • Not yet profitable, but operational indicators are improving.

Notable Quotes:

• Tim Byers [01:03]:

  "Growth is accelerating. Revenue from the cloud-based Atlas database grew 29% in the second quarter. That is impressive."

• Tim Byers [03:56]:

  “The short squeeze is probably a recognition that the business is improving faster than bearish investors expected...In the short term, I think you can expect continued volatility.”

• Rick Menars [05:19]:

  "Buy high, buy higher might be the best four words of market advice for long term investors."

2. CrowdStrike & SentinelOne: Cybersecurity’s Top Dog and Challenger

[06:00 - 13:46]

• CrowdStrike’s Post-Outage Recovery:

  • Outage caused reputational harm and a 23% share drop.
  • Business faced tougher customer trust issues and margin compression, but growth continues.
  • Recent quarter: Net new ARR (annual recurring revenue) finally up year-over-year—a recovery sign.

• Where Will CrowdStrike’s Growth Come From?

  • Majority will come from existing customers expanding service, not new wins.
  • As the industry leader, adding incremental new customers is tough; upselling modules is the greater opportunity.

• SentinelOne as Rising Challenger:

  • Growing faster than CrowdStrike in percentage terms; leverages AI-powered endpoint security.
  • CEO/founder owns 25%, fostering founder-driven culture.
  • More open/tech-driven; “plays well with others.”
  • Compared to “Pepsi vs. Coke”—the market is big enough for two winners.

• Valuation Gap:

  • CrowdStrike’s multiple is high for its slower growth.
  • SentinelOne trades for about a third of CrowdStrike’s valuation with much faster growth.

Notable Quotes:

• Jason Hall [06:56]:

  "There's been issues. The company clearly has had to work harder to regain trust...margins took a hit...Net new ARR came in lower...it's still growing, but weaker margins, slowing growth—they don't lie."

• Tim Byers [08:36]:

  “If the recovery really is working well, then those customers that decided to stick it out...are spending more—that would be a pretty darn bullish sign.”

• Jason Hall [10:20]:

  “This is the top dog in the space...Its growth rates are slower but its revenue dollar growth is substantially larger…So I think overwhelmingly it’s going to come from those existing relationships.”

• Jason Hall [11:57]:

  "I don't know if this is as much a case of the lamb eating the lion...Maybe more like a Pepsi-Coke situation. Cyber security is so big that there could be multiple winners."

3. "Improv Due Diligence" Game: Bullish & Bearish Bricks

[14:33 - 20:19]

A unique twist – each analyst pitches a favorite stock with a basic bull case. The others build on it “Yes, and…” before flipping to “Yes, but…” for challenges, before closing out the segment ("and seen").

a. Mercado Libre

[15:10 - 16:53]

• Bullish Bricks:

  • Dominant in Latin America e-commerce and fintech.
  • Region is earlier in digital adoption (lots of runway).
  • Payments/remittances are a huge opportunity; advertising growing.
  • Mexico market still in early innings.

• Bearish Bricks:

  • Lending, not commerce, has powered most recent earnings.
  • Credit cards/lending increases risk profile.
  • Competition in core e-commerce is coming.

b. Duolingo

[17:18 - 18:38]

• Bullish Bricks:

  • World’s leading language learning platform with “stellar unit economics.”
  • Engagement growing (daily active users outpacing monthly).
  • AI enhanced their business model rather than undermining it.

• Bearish Bricks:

  • Google Translate and language LLMs are emerging substitutes.
  • The nature of language learning is fad-like, often not sustained.

c. Warby Parker

[18:56 - 20:19]

• Bullish Bricks:

  • Disrupting the legacy eyewear industry.
  • Entering AI glasses market with Google.
  • Stores are rapidly expanding and highly profitable.
  • Huge addressable market outside North America.

• Bearish Bricks:

  • Remains a small player versus industry giants.
  • Entrenched relationships with incumbents make disruption hard.
  • Still trading under IPO reference price.

Notable Improv Quotes:

• Tim Byers [17:25]:

  "It has some of the best unit economics I've ever seen. It's not uncommon to see a dollar of sales and marketing expense produce $7 or more of new revenue." (Duolingo)

• Jason Hall [16:25]:

  "Move fast, breakthroughing things works great when you're building a tech platform—not so much when you're letting other people use your money." (Mercado Libre)

• Jason Hall [19:06]:

  "This is definitely an industry that is ripe for disruption—with one giant player and not a lot else." (Warby Parker)

Timestamps for Major Segments

• MongoDB’s breakout & buy high philosophy: [00:00 - 05:19]
• CrowdStrike’s post-outage challenges & SentinelOne rivalry: [06:00 - 13:46]
• Stock Improv Game (Mercado Libre, Duolingo, Warby Parker): [14:33 - 20:19]

Memorable Moments & Quotes

• Rick Menars [05:19]:

  "Buy high, buy higher might be the best four words of market advice for long term investors."

• Tim Byers [03:56]:

  “Acceleration tends to lead to more acceleration. Or as David Gardner likes to put it, winners keep on winning.”

• Jason Hall [11:57]:

  "More like a Pepsi to the Coke...Cybersecurity is so big there could be multiple winners...Pepsi has actually been the better investment than Coke."

Takeaways

• Strong businesses can remain excellent buys after big gains ("Buy high, buy higher").
• Short squeezes and volatility should not distract from improving fundamentals.
• Market leadership (CrowdStrike) brings advantages and limits; challengers (SentinelOne) can thrive with differentiation.
• In emerging markets and new business models (Mercado Libre, Warby Parker, Duolingo), both entrenched advantages and evolving risks merit close watching.
• Improv-inspired investing can yield fruitful, fun due diligence!

Analyst Tone: Informative, conversational, occasionally playful; strong focus on long-term thinking and deep company analysis.

For more:

• Check individual stock recommendations and disclosures at Motley Fool.
• Never trade solely on podcast content; do your own due diligence.