Yep @OxyBBear that’s what I figure is driving the price down and it’s an idea I reject fully. Freight management is a critical core function of freight forwarding businesses, the idea they would switch to an AI built tool without years of testing and perfecting is absurd. Over which time WTC has a proven and reliable product they can augment with AI features which are fully tested at industry scale for roll out.

The idea that AI suddenly means you don’t need a good systems development team to build core business function systems and processes is nuts – it helps but doesn’t replace. So unless your core business is doing this to start with you probably don’t have the talent and organisational knowhow to do it well. No one with any brains is just handing over their business to AI to run systems they don’t already have a deep involvement in running and maintaining.

Well that’s my view and I am putting my money behind that – time will tell if that’s the case.

@Tom73 @OxyBBear

I think there’s a few of us here that are seeing a decent amount of red in our portfolio, having thought earlier dips over the last couple of months were good buying opportunities.

To add my portfolio to the SAAS hall of shame, I am down 50% on WTC and 25% on PME having recently initiated positions after what I thought was a long enough time waiting for an entry at seemingly decent valuations. In hindsight I could have been more patient in my averaging in for both, but FOMO and a conditioning to years of high valuations played a factor. Lesson learned.

Still only about 5% of my overall portfolio, so now I need to go back to the conviction in my original thesis and monitor whether it still remains true over reporting season. Essentially it’s that new AI-assisted startups can possibly, but won’t easily replace dominant enterprise software, since core systems are ridiculously embedded, regulated, and trusted. Incumbents hold workflows, compliance, and data moats built over years of real-life use and tailoring products to customer feedback. Switching costs aren’t cheap, and I suspect trusted incumbents offering low-risk opportunities for execs to dip their toes in and tell board/shareholders they are using AI will not be switched out easily in a high interest rate environment.

Similar fears occurred when new technologies like cloud and mobile were introduced, creating industry shifts and panic that incumbents would be wiped out. Some leaders did indeed fall away, but the ones that adapted saw massive re-rating over the following years as the new technologies improved productivity, usage rates, and pricing power.

It has seemed to follow this pattern:

Phase 1: Fear crash

Big drawdowns, multiple compression leading fundamentals

Phase 2: Sideways digestion

Volatility + skepticism, markets want to see proof of new model working

Phase 3: Evidence-driven rerating

Winners separate, multiples stabilise

Phase 4: Compounding

Growth + narrative align, sustained appreciation

The real differentiator going forward for me now is which incumbents successfully transition to new usage/value-based pricing models and show evidence that the pricing transition is working at least as well as before, if not better, alongside margin resilience and customer retention. Those that do are more likely to survive and thrive; those that stick to old seat-based pricing risk being left behind by reducing business headcounts due to the efficiencies that AI use is enabling.

So I’m going to do the boring thing now and dollar cost average into the companies that show they are evolving prudently. Will do some buying pre-results, but also setting aside some cash for post-results if the thesis holds. Happy to miss out on some early gains for the sake of the sleep well at night factor.