I am extremely thankful to have made a living in dealing rooms for most of my working life. There is a camaraderie and sense of humor that is second to none. I learned valuable lessons, not just about trading and investing but also, without wishing to sound too pretentious, about life.
There is, however, one big downside: I often tend to miss or dismiss the obvious. When it comes to 3D printing, though, and Stratasys (SSYS) in particular, I can clearly see and readily accept the obvious case for a long-term investment.
I am a contrarian. How much of that is down to a naturally obstreperous personality and how much to the fact that such a stance served me well in the foreign exchange markets for nearly 20 years is open to debate, But the fact is that I did survive that long with that approach.
It is based on simple logic. If an idea is obvious and often talked about, then the chances are that anybody who wants to act on that idea probably already has. 3D printing definitely fits that description. If everybody is long the major 3D printing stocks, then there is far more room to the downside than the upside.
The problem with that approach, of course, is that it is extremely short term. When a new industry truly has the capacity to transform manufacturing and maybe the way consumers purchase, then market positioning is irrelevant. For a long-term view like that, though, you need to be invested in a company that resists the temptation to focus on quarterly profit and is prepared to invest in the future of the industry. Evidence from last week's investor day held in New York by Stratasys would suggest that that is what they are doing.
I was not at the meeting, but have read reports from those that were with interest. The company chose to focus on growth strategy, both short and long term. In the short term they are on target to release a total of 41 new products in 2014. This may seem like a ridiculous amount, but it is an indication of how fast technology in the nascent 3D printing industry is moving. This makes it difficult for new entrants to the market, even giants like Hewlett-Packard (HPQ), to hit the ground running.
In the long term, the company is undertaking some restructuring (in the real sense of the word, not just as a pseudonym for job cuts) as they seek to further integrate material, machinery and software products.
Stratasys is seeking to rationalize in expectation of becoming a much bigger company in the future. They have not just promised growth though; they have actually delivered, with revenue increasing by over 25 percent on an annual basis. The industry has a reputation for exaggerated valuations, but SSYS doesn't look overpriced at a forward price-to-earnings ratio of around 46, given that growth rate and the long- term nature of the investment.
There is nothing original or stunning about recommending a 3D printing stock. If anything it is a little clichéd, and that would usually put me off. There is one obvious problem; the market positioning and the volatility make it difficult to say if these are optimal entry levels or not.
If Stratasys emerges as an industry leader, however, and that industry fulfills its potential, then where you buy now won't matter. It will be enough that you just do, no matter how obvious it is