Is it better to be lucky or good?

My best investment outcome in 2021 was $INMD but I will admit there were aspects of luck.

The stock finished up 204% in 2021, and at one point in the year it was up +322%. I was able to close my trade with a +111% gain, which is great, but my perspective on the company wasn't as clear as it should have been when I entered the trade. I entered based upon my own excitement of the underlying technology and perceived demand for the product. I conflated a rising market and overall momentum in the stock as confirmation of my thesis.

At the time I viewed INMD as a pure play on the theme of non-invasive aesthetic treatments. I considered Covid induced lockdowns to be a catalyst as people may have gained weight and wanted to look good for the reopening. Both of these statements are reasonable but that's really all it took for me to enter the trade. I was able to successfully practice averaging up and ride the trade until they announced a 2 for 1 stock split. In 2020 Apple announced a 4 for 1 stock split and the stock subsequently rallied on the news and sold off after the split occurred. With this in mind the volatility in INMD around the news of their upcoming split led me to exit my position as I was attempting to "buy the rumor, sell the news".

Currently INMD is -45% off it's 52w highs and it remains high on my watch list. I still love the underlying theme of non-invasive aesthetic treatments and now better understand the business model. It's a bit of a razor + blade business model so the run up in 2021 may have just been pulling forward demand for the razors and moving forward it becomes more a blade business. This remains to be determined as the TAM may be larger than most believe.

For those interested, I think the Inmode Instagram page is a great place to start. InMode's customer isn't you, it's the medical office. Once an office buys a device they jump onto social media to educate consumers on their new service. I think this is a really powerful cycle that drives both patient interest in the treatments and medical office's desire to invest in an InMode device.

(quote from management on the effect of social media)