I sold Duolingo and bought MSCI instead

I have sold my small position in $DUOL ( ▼ 1.18% ) as I realized I didn't have the required conviction to hold this one long term. Even though the stock looks undervalued and the financials looks attractive, I don't consider it a well established player in the education industry. I have seen other online education stocks such as $COUR ( ▼ 1.97% ) and $UDMY ( ▼ 0.96% ) that started with similar rate of growth but over time they start to struggle as competition grows and profit growth stagnated as customers cutting education budgets under economic pressure.

You can argue that Duolingo is a better run business with a more sticky business model and is more profitable, but I am personally not sure if it will continue this way as more competitors appears and start to take market share. I think it is much more easier for competitor to create an app to compete with Duolingo, compared to creating another indexing business to compete with $MSCI ( ▲ 0.42% ) , or competing with Visa with a new payment network. I think I simply don't know enough to be able to hold this stock through all the big fluctuations in the market.

As a result, I walked away with a small profits and reinvested the proceeds into MSCI, which I consider a much better company with very strong moat, and has become more attractive after its recent drop.

See my original post and tracked trade here.

DISCLAIMER: Solofire is not a registered financial advisor. This post contains author's personal opinion only and it should NOT be considered financial advice.