Researching investors should look at big data analytics

Businesses generate a tremendous amount of data each day, and the proliferation of software and connected devices often results in a tangled mess of information.

With data stored across separate systems, both on the premises and in the cloud, it’s difficult to use that data productively. Digital transformation has made corporate information technology ecosystems even more complex. That’s where Snowflake (NYSE: SNOW) can make a difference.

The Snowflake Data Cloud helps clients manage and make sense of siloed data sets, all from a single platform. The Data Cloud also supports the secure sharing of data and simplifies the development of data-driven applications.

Better yet, Snowflake is infrastructure neutral, meaning it’s designed to work across all three major public clouds, giving it an edge over Amazon Web Services, Microsoft Azure and Alphabet’s Google Cloud.

That competitive edge has the company growing like wildfire. Over the past year, Snowflake grew its clientele by 44% to 5,944 customers, and the average customer spent 78% more than in the year before, demonstrating the stickiness of its platform. Meanwhile, revenue skyrocketed 106% to $1.1 billion.

Snowflake’s shares can be volatile, but if you’re a risk-tolerant investor, it may be smart to buy and hold some until you retire. (The Motley Fool owns shares of and has recommended Snowflake.)

Ask the Fool

Q: What’s a sunk cost? – D.D., Waverly, Nebraska

A: It refers to a price paid that can’t be recovered. Since it’s gone and not coming back, it shouldn’t factor into decision-making.

Still, many people act on a “sunk cost fallacy” – they figure that since so much has been spent already, more should be spent to make the initial expense worth it.

For example, imagine that you spent $1,200 repairing your car, and you’re deciding whether to sell it or spend more on further repairs.

Don’t think about the $1,200; instead, think about whether spending more or selling makes sense. The $1,200 is a sunk cost – don’t let it lead you to throw good money after bad.

Q: When is the ideal time to sell a growth stock and buy a long-term, stable stock? – C.R., Tigard, Oregon

A: Try thinking about it a different way: You don’t have to choose between the two.

There are plenty of relatively fast-growing companies that have long track records and promising futures.

Relatively few stocks are very stable, though, as the stock market itself can be volatile.

When there’s a market crash, even blue-chip stocks can take a big hit – but every market crash has been followed by a recovery, with stocks of many solid companies going on to hit new highs.

So keep your focus on the long term, aiming to hold your stocks for at least five years or so, and keeping any money you’ll need within five (or even 10, to be more conservative) years out of the market.

Don’t be afraid to own growth stocks – just aim to buy them at attractive prices and follow their developments over time.

My dumbest investment

My dumbest investment? Years ago, I was watching CNBC. A tiny stock was going nuts, with reporters saying the company had a new technology. I called my broker (yeah, this was in the old days) and bought 1,000 shares. It turned out the company was a fraud and was soon busted.

What’s left of the stock (very little!) still sits in my IRA, reminding me how not to invest. I’m glad it was cheap, at least. – S.J., online

The Fool responds: It was super cheap, indeed – it was a classic “penny stock” (originally, one trading for less than $1 per share, though now the term is used for those trading at less than $5).

As you know, the company claimed it had a revolutionary fingerprint identification technology.

In 1996, the CEO appeared on CNBC touting the technology – and one of our Motley Fool writers penned a piece questioning why CNBC would give so much airtime to a penny stock.

Penny stocks are typically tied to small, often unproven companies that can be easily manipulated. You may have noticed, in April 1996, that your shares went from 3 cents apiece to around $2.

Companies don’t generally become that much more valuable in the course of a month. The company was being hyped online, and it ended up facing allegations of fraud and a lawsuit from the Securities and Exchange Commission.

Its shares, as you know, tanked after that.