I feel that I really made a big mistake in recommending the three little penny stocks that I was playing with (KRED, CTSO and AEYE). While I tried for the most part to make it very clear that I was only taking tiny to small positions in them, I’m afraid that some less experienced people on the board got carried away and bought larger positions of these very volatile and early stage stocks. It was poor judgment and unforgivably stupid on my part to even mention them on this board. I really am sorry.
On the other hand my larger positions have all had excellent reports. My big four (SYNA, UBNT, BOFI, and CELG) and my next two (Z, SKX) have all reported already and continue to have excellent growth. This adds up to 60.4% of my portfolio.
Then SZYM made good progress, if not good earnings, AIOCF had sales up 69% and adjusted earnings up 49% removing foreign exchange and acquisition expenses. They sold off yesterday when an analyst reduced his target from $45 to $40 with an outperform rating. They were at $20, for god’s sake! AMBA hasn’t reported yet. Neither has PFIE, but the corporate update they announced is the picture of a company that is booming sales. JCOM is doing fine.
Then we have SWKS, a recent MF recommendation and a new position for me, WAB, which just keeps chugging along, and AEYE. After listening to the conference call, I am willing to stay with them. (see post #3007).
That brings me to 96.05% of my portfolio, and the remaining 3.95% is made up of six positions that are either purposely tiny, ones I’m just starting, or ones I’m thinking of getting out of.
Sorry again for foolishly mentioning positions I should have just kept to myself.
I, for one, think you were pretty darn clear that these were small “test” positions, although I thought possibly AEYE was a slightly larger test. You’ve also said that your intent is not for people to mirror your holdings. I think it’s great that you give us all a view into your (so far) very successful methods. What if you hadn’t mentioned any of those and one goes on to to be a 10-20 bagger. Then you’d have to apologize for not saying anything.
Steve
(who holds a little AEYE, but no KRED or CTSO)
I agree with Steve, I definitely enjoy seeing these types of suggestions on this board particularly for the reason that TMF won’t be recommending companies this small. All of us have jumped in a bit overboard on certain stocks early in our investing career, and I think those are the ones I learned the most from. We’re all big boys (and ladies) and know that we need to do our own research before jumping blindly into a position, even if it is recommended by someone that has been as successful as Saul has.
I did probably jump in a bit prematurely on AEYE, but once I did, I did my homework and knew what to look out for when Q2 was announced and was able to get out quickly (and hopefully gave some others on this board an opportunity to do so, if they chose to) with only a small loss, probably even before the analysts that cover the company realized what was the company had really reported. Even if someone bought in over $1 and is selling today at 75 cents, the risk reward wasn’t horrible to lose 25% with the possibility of making a few hundred percent in 2 years or less.
Considering that the real max downside could have easily been 100% with a stock like that, the fact that we’ve identified the red flags quickly enough to bail (if we choose to, I know a lot of folks on here are still holding AEYE) with only a 10-25% drop depending when you bought, is pretty good.
Who knows, AEYE could still be a $3-5 stock within a year or two. It wouldn’t shock me. But I’m happy being on the sidelines at the moment and look forward to following the story a bit further. If things turn more positive in another quarter or two, I could potentially see myself buying back in, you never know. Most likely tho, the best chance to cash in well on AEYE imo would be for a buyout, and unfortunately, you can’t really predict when that will happen ahead of time so keeping a small position still may not be the worst decision, but that’s a bit more gambling than I want to do with a company where I know I won’t be getting any formal coverage from MF.
I agree that you told people those were tiny positions.
I wonder if anyone else is having trouble with executions on AIOCF. I have a quote for Fidelity at 18.50 and a limit order in for 18.50 but I have been sitting waiting for a fill for quite a while now and nothing happening.
I really appreciate your willingness to share your positions and why you invested in them. You did warn and make clear that KRED, AEYE, etc. were tiny positions and speculative.
Your involvement is limited to sharing information, the best information you have with appropriate warnings. What others do with that information is out of your control.
Chris articulated what I wanted to say better than I ever could. Please keep posting your thoughts as I find them incredibly valuable. I decided early on that AEYE and KRED weren’t for me but I have benefited greatly from the discussions here regarding SYNA, UBNT, PFIE, and PSIX, which are new positions I’ve taken in the 6 months that this board has been around.
I’ve also long held positions in Z, TRIP, and MTZ, which have also been discussed here.
In short, keep doing what you’re doing - we appreciate it!
I look forward to your posts, and I recognize that I am responsible for my decisions; so not to worry. Keep posting! Thanks for sharing your thoughts, insights, and recommendations.
Saul, we’re all adults here, and I think you’ve always made things very clear. I personally appreciate your openness.
I think you also raise a good point that I frequently see folks lose sight of across TMF: at the end of the day, all that really matters is how one’s portfolio as a whole is doing. Every portfolio is going to have occasional laggards or outright losers (sometimes even on purpose, for those of us who hedge). None of that matters, though, if the portfolio beats the market (or whatever other benchmark or personal goal you prefer).
It’s important not to lose sight of the forest for the trees.
Thanks everyone for the support. I really appreciate it. Although I do feel that I have somewhat of a responsibility here even if people make their own decisions.
I don’t know what more you could have done to make the risks associated with those small holdings clear to the reader. You were very clear, as everyone has pointed out.
You deserve to not only give, but also to get something from this board.
When you find an interesting small company and mention it, a whole bunch of very smart people, who have been attracted here by your excellence, start analyzing it and posting about it We all learn, including you, and if there is some benefit in that to you it would be only a tiny repayment for your contributions.
Ling story short: please keep posting your ideas as you have done (if you feel like it). We all benefit.
You’re very gracious to offer an apology, but I think it is not needed. About KRED, CTSO and AEYE, you told us right from the start:
-these were very small positions for you
-they were small, innovative companies that were largely untested, i.e. risky
-that you weren’t recommending them to us
As others have said, we’re grown-ups who are responsible for our own decisions. I, for one, appreciate learning about these types of companies if only to broaden my investment knowledge and focus on the evolution of tiny companies.
I eagerly await your next KRED, your next CTSO, and your next AEYE.
I also wanted to add that there is no need for an apology here. You made it very clear that the positions were small and that we should be very careful buying them.
I do understand what you mean though, feeling a sense of responsibility. I think there are many people that subscribe to TMF newsletters that blindly buy the recommendations, and that can lead to some negative posts when a pick falls hard. Still, the fact that you posted multiple times to be cautious with these smaller positions should have been enough, I (and it seems many others here) thought it was clear. Besides, not every pick we make is going to go straight up.
I’m curious though, you didn’t mention PSIX in your post, was that an oversight or have you moved on from them?
I read a while back if you want to succeed in anything, find someone who did and ask them to teach you. The problem is that very few would do this voluntarily. I admired you generosity and courage and hope that you will be rewarded for what you are doing. There is no need to apologize!
I have been investing in the market since 1995 and have now learned how to fine tune my strategy from this board. Simple ideas like, get and build your own data about companies, invest in fast growing companies ONLY, don’t buy the next big thing, wait until they are profitable etc. made me look at my portfolio with a fresh perspective. Today, I’m a lot more confident than I ever was. Where else would I have the opportunity to learn from folks while they’re “walking the walk”.
What WE need to understand as investors are our own risk tolerances. What might be a small loss for someone may be a LARGE loss for another. Our reactions to losses are different and we have to learn about our own emotion and take acceptable risk. Also, we will not win on all our picks - a basic assumption when investing in the stock market.
I do study your portfolio and style and try to understanding why you take different actions by reading your posts. It provides a wealth of information for folks like me. That said; please continue to posting your positions and percentages regularly. We are all responsible for our actions.
I wonder if anyone else is having trouble with executions on AIOCF. I have a quote for Fidelity at 18.50 and a limit order in for 18.50 but I have been sitting waiting for a fill for quite a while now and nothing happening.
My orders at E*Trade have taken tens of seconds, if not minutes, to fill, even though I placed a limit order a few pennies above the current ask price. There seems to be a gap of time between my order being placed and the first partial fills. The partial fills complete within a second or two of the first partial fill.
In contrast, my orders at Schwab have filled as fast as I could click on the “order status” link. Saul said that Schwab was actually buying the shares directly on the Toronto exchange. Interestingly, my first order for AIOCF at Schwab presented me with a new warning message: something to the effect that this was an over the counter stock, and so there could be problems with price volatility or failing to fill.
-Mark
… who is content to sit on his tiny AEYE position and see how it plays out.
Saul,
No apology needed.
I generally don’t post a lot and for a while didn’t frequent the boards much, but lately I have been checking this one quite a bit and it has helped me a lot with reevaluating on how my own portfolio is structured and cleaning up some of the nonsense in it that doesn’t really fit what I want. When I have time I’ll write some of those thoughts up in case anyone else may find them useful too.
You provide a tremendous amount of information on this board and posting your thoughts out loud have led to a lot of collective intelligence being applied to evaluating these companies.
You were very clear about the risk in the stocks and everyone can make their own decisions. Personally I dipped my toe in a little just to pay attention to them as I learn more, but I reserve a bit of my portfolio for high risk experiments that I’m expecting to either see 0 or 10x+… and it was only a small chunk of that piece, so I can’t say it has been a bad decision to do so.
Thanks again for all your info here. I hope you don’t feel the need to self-censor other ideas, even if they are just you thinking out loud.
Man, your still doing an Outstanding job in spreading the wealth of your knowledge. President Ronald Reagan once said in his famous speech to the Russians, “Trust but verify”. As a Techie, I need to verify.
Quillnpenn - You provide a different perspective in analyzing investments based on charting, which in reality is very compatible with fundamental analysis
I am always interested in Saul’s (and other contributors to this valuable board) discovery and research of companies which merit potential investment … I then do my own due diligence … and then consult the charts to determine an optimum entry point and profit target.
