A comforting post?

I’m not worried our portfolios will get cut in half again from current levels. I can’t predict the future, but I feel like a lot of the pain has been baked in for a while now – we had a nice little rally back up, but we’ve come back quick. DDOG is now only 20% above its recent low, and CRWD, S, and MNDY are only 30-something percent off their (in my opinion harsher) lows. We have some that have bounced a decent amount like BILL and NET and TTD, but nothing is up more than 50-something or 60-something percent from some pretty ridiculous lows. And heck, even MDB is 15% above it’s low. So we’re range bound, at least in my eyes. And who knows, that could go on a while.

That said, since we have people coming on the board and talking about changing strategies, balancing their portfolios with non-growth stocks etc…well, I assume there’s some fear out there. And to be fair, we don’t know how crazy it will continue to get and be. Also, I would never, ever tell anyone how much, whether 1% or 100% of their net worth, to invest in growth stocks. The answer is different for each of us.

But when it comes to this kind of investing, the swings are huge. A common refrain from bears in boom times like 2021 when we at Saul’s were making insane returns is: Trees don’t grow to the sky. In other words, companies don’t go from being SentinelOne sized to being Google sized in a year or two. Revenue doesn’t grow at 100% or 200% or 1000% year over year for long. And…duh.

But I have a phrase for the times when our portfolios are down: Trees don’t grow to the sky…but when they get trimmed, you don’t cut them down to the root. A little clunky. But I’m basically saying, these companies aren’t going to zero, and their stocks aren’t done going up. It’s a matter of when…as long as we manage to continue to pick the best companies. Then we wait.

Yes – times like these aren’t fun. I’d rather be making killer returns! And it makes it that much harder to have to give up on one (like I did with MDB) when it’s back near its low. But this style has served me well for many years. And it’s served Saul for decades.

Again, it may not be the style for you. At least not with 100% or even 50% of your portfolio. This board is not about discussing that. It’s about discussing this style – growth investing.

And I’m still here for it.

Bear

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