Investing is simple – ‘buy quality and verify quality,’ but incredibly hard to execute. SWI ( sleep well investment) newsletter has enjoyed a very good two and a half years, until one mistake and an AI-induced SaaS multiple compression brought the portfolio down. But changing strategy now would be a trajedy – ‘buy high sell low’.

Patience is required.

The good news is that their investment period runs until 2037, so what has happened in the past 6 months might not matter much in a few years, and definitely not in over a decade. They still believe that consistently (i) putting aside emergency funds, (ii) investing excess in high-quality companies, and (iii) staying invested through tough times will help them build a reasonable capital and knowledge base for their daughters’ future.

Today, there have putting money where their mouth is – they will initiate a starting position in SWI Pick #24 and add more over the next few quarters.

Learning from their mistake, this is a more predictable business and will be a smaller starting position.

#24 is a technology leader whose alternatives are legacy solutions and AI as an accelerator instead of a competitor.

The product is mission-critical to top-tier hospitals, 100% of whom renews long-term contracts lasting 5+ years.

Durable growth opportunity with a large whitespace and a market cap of under $10B.

Clean financials and prudent accounting, no debts, 50% of cash allocated to dividends, and capex-light.

Risks include high valuation, looming succession planning, legacy solutions fighting back, and AI still bringing uncertainties.

Why now ?

 According to SWI newsletter, The business has been perennially expensive, but it has been bundled with the ‘AI SaaSapocalypse’, pulling the stock down by nearly 60% in the last 7 months from its peak, giving it a good time to buy in stages (dollar-cost-average) into a position, or at least to do the work now before we get a better entry point.