Market timing isn't really investing. Nobody knows where the market is going tomorrow, or what a particular stock will do next week. Surprises come along all the time, moving share prices up or down without any prior warning. Betting on price moves in the short term is exactly that -- a form of gambling. True success in investing comes from buying shares of fantastic companies with great management teams, holding those shares for a long time, and allowing compound returns to work their magic.
That said, it certainly doesn't hurt when those incredible stocks happen to be available at bargain-bin prices. That's what I see in Fiverr International (FVRR 2.49%) and Silvergate Capital (SI 11.11%) right now. And this may not be the absolute market bottom for either one of these spring-loaded stocks, but they are dirt cheap and you can always buy more if the share prices continue to fall.
Fiverr: Disrupting the world of work
The world of work is changing in front of our eyes. For better or worse, the old tradition of establishing a career with a 9-to-5 work schedule, pension plans, and a gold watch at retirement is fading out. The so-called gig economy is nibbling at the edges of that plan, threatening to replace it entirely in some industries.
Fiverr International is not just leading the charge. This company wrote entire chapters of the gig economy playbook and continues to innovate. Always popular with clients in the category of small and medium businesses, Fiverr recently pushed into the enterprise space with the launch of Fiverr Business. This freelancing services marketplace helps buyers identify needs that can be filled by a qualified freelancer, and provides onboarding templates for new freelance relationships. The platform is only two years old but already represents more than 5% of Fiverr's total gross merchandise value (GMV).
"We believe the online freelancing market opportunity is vast and is in the early innings," Fiverr CEO Micha Kaufman said in a recent earnings call. In other words, Fiverr should be able to grow rapidly for many years before running into any meaningful market saturation.
Many market makers appear to have missed that memo. Fiverr's recent growth spurt is widely seen as a direct result of the early coronavirus lockdowns. The stock is down 89% from mid-February 2021, when COVID-19 vaccines became widely available. At the same time, Fiverr's sales growth continued to skyrocket, indicating a healthy business. There is a clear disconnect between the company's high-octane growth and the stock's dramatic plunge:
FVRR Revenue (TTM) data by YCharts
This is the stuff that wealth-building investments are made of. Fiverr's stock is poised for a powerful rebound in the long run. The road to unlocking that bounce may be bumpy and Fiverr's stock could drop even further, but you shouldn't let that stop you from investing at these inviting share prices.
Silvergate: The bank that makes the crypto market tick
Cryptocurrencies and crypto-trading services don't stand alone. They have to connect to the traditional banking world in order to let people and businesses exchange real-world currencies for digital coins. Silvergate Capital was an early provider of financial services to crypto-based projects, and remains a leading lender in the space today. Furthermore, the company has developed its own technology platform to manage transactions involving cryptocurrencies and fiat currencies. This Silvergate Exchange Network (SEN) is always on, providing trading services around the clock and around the world.
This combination of crucial crypto-trading infrastructure and plain old capital assets makes Silvergate a unique entry point into the cryptocurrency market. By investing in Silvergate, you can benefit from sustained growth in this sector without picking any specific winners among the thousands of blockchain currencies that are available today. Silvergate and SEN stand behind a plethora of crypto projects.
For example, this is where MicroStrategy (MSTR 1.09%) turned when it wanted to sign a loan secured against the enterprise analytics company's existing Bitcoin (BTC -1.19%) holdings. And pretty much every crypto exchange you ever heard of operates on the SEN platform, including Coinbase (COIN 1.83%), Kraken, Bitstamp, and Crypto.com.
So Silvergate lets you tap into the crypto market without directly owning any digital assets, and with the benefit of running a growing and profitable business. In the second quarter of 2022, the bank's earnings surged 41% higher year over year along with an 18% increase in assets under management. The SEN system handled $191 billion of cryptocurrency transfers during the quarter. And the company achieved these top-quality results in a period when Bitcoin prices fell by 57% and Ethereum (ETH -1.18%) ticked 68% lower. Now imagine what Silvergate can do in a cryptocurrency bull market.
Bitcoin Price data by https://ycharts.com">YCharts
And of course, the stock is on fire sale right now. Mr. Market brushed off Silvergate's robust business results to focus on the idea that anything in the cryptocurrency sphere must be risky. Share prices are down 43% in 2022, and Silvergate trades at the modest valuation of 10.7 times forward earnings. This is a great stock to buy today, and perhaps buy more of if there are more price drops on tap.
