Bear's Portfolio through 02/2024

Important context for my portfolio reviews: I run a concentrated portfolio and WARNING the swings can be huge. From the 2021 high to the 2022 low, my portfolio fell more than 60%. For every $100 I had at the top I had just $40 left! Staggering. So, before trying this style, even with a small portion of your total net worth, please understand the downside – it’s much steeper than if you own an index, or a bunch of megacaps. Also, don’t follow or copy me, Saul, or anyone. We may sell a position or buy a new one at any time, so it’s impossible to follow anyway. Also, to succeed with a concentrated portfolio, you must rely on your own decisions.

February was nothing short of an incredible month. My portfolio gained 7.2%, yet was a big laggard in many ways. I had 2 positions (Axon and Remitly) up 20%+ this month, and 1 position (ELF) up 30%+. But just of companies on my radar, Celsius was up 64% this month, Supermicro was up 64% this month, Confluent was up 52%, Palantir was up 56%, Robinhood was up 52%, Carvana was up 76%, Duolingo was up 34%, Pure Storage was up 32%, Nvidia was up close to 30%, and many others were up 20%, 25%, or more. That’s an unbelievable month for a lot of stocks.

I didn’t see any of those big gains coming, except (to an extent) for Axon and ELF. And for many of the above, I don’t even understand in retrospect. If the market is being irrational, it can continue. If I’m being irrational or I’m just wrong, that can also continue. The way I see it, there still aren’t many opportunities. But I wanted to highlight the fact that I’ve missed many opportunities in February – there’s no denying that.

What I’m doing is new, for me. In addition to the T Bills I added last month, I added 2 index ETFs this month. Despite all this, because I trimmed my stock positions pretty aggressively, I still remain around 40% cash. I’d love to have less…I just need to find companies whose stocks I want to buy. It’s not for lack of trying!

I did find two this month, both companies I’ve owned before: Zscaler and Transmedics. More on those below.

A word about the positions I own:

The two no-brainers

Axon - They reported yet another fantastic quarter on Tuesday (2/27). Even with the price increase, I trimmed a bit, but I’m happy with a fairly large position, and I think the price is fair.

Monday - They reported a very solid quarter and it seems to be “all systems go” for them. The price seems fair and I’m keeping a pretty large position.

The ones I can’t get as excited about…yet

Transmedics - I have been expecting growth to fall off a cliff, and it keeps not happening. We’ve watched them go from a tiny tiny tiny revenue base of $30m in 2021 to over $240m in 2023. That is astounding. And they guided to $370m for 2024. I just have to be involved although there are many risks. Great thread here: TMDX Q4 FY23 Earnings

Google - Just a rock solid place to park some money. Would add if it goes down and trim if it goes up. (Trimmed some this month when it was up.)

Remitly - They reported a solid quarter and it shot up, but as they are still cash flow negative, I took some off the table after this bounce. Just want to be cautious in case the business model just turns out to not be so great.

Samsara - Priciest stock I own, so I trim every time it’s up, as it was double digits this month. They report next week. I expect it to be strong, but I’m fine with a small position at this price. Still, I can’t find fault with the numbers so far. Important for me to remember that.

Zscaler - Added this one back after it dropped 15% on the Palo Alto report. They ran right back up and I trimmed it. They reported today and it looks like they’re falling again. Perhaps I’ll re-add. From what I can tell so far, this quarter was a beat and raise, but less of a beat than usual. To be expected. They’re slowing down over time…law of large numbers. But the quarter seems quite good to me.

Amazon - See Google (above). Trimmed since it was up.

Klaviyo - Last month I said, “They’re similar to Braze which hasn’t impressed me…but Klaviyo’s numbers are better.” Well, they were better. They came in with 39% growth in Q4 (reported Tuesday 2/27) which is good of course, but has slowed sooooo rapidly. They guided to 28.5% growth next year. Should beat, and low 30’s is fine. But not exciting. They also had an ever so slight miss on Op Income. Just be better, please. I trimmed.

ELF - Ok, this is a company I love, but everyone has their limit, and I guess $200/share is mine. I thought ELF was a huge opportunity at $93 as of October, and even $118 at the end of December. I still loved them at $144 at the end of December. At $160 on Jan 31, it was still my 2nd largest position. But now at $209, I’ve cut it to under 1%. Stocks don’t go up every month forever. I may miss out as it hits $220 and $230 in March or April, but that’s ok. I think the low hanging fruit has been picked. If instead it comes back down to earth, I’ll add back. I think the quarter they reported on 2/6 was solid, but not spectacular. The growth was great, but the acquisition muddies the picture a bit. When they report Q4, 9 or 10 weeks from now, they’ll have to guide for the new fiscal year. With the price up, there’s some risk there.

Wrapping up:

I know I have harped on my idea that I’m not seeing many great opportunities. And now my short list of Axon, Monday, and ELF is down to just Axon and Monday. It’s not so much that I am shocked that other things are doing well. It’s that I find it incredibly difficult to pick the winners right now. Like ELF this month, some of the best stuff has run too far for me. Too rich for my blood!

Part of the reason for wanting things “at a bargain” or a “no brainer” price is that with a higher price comes more risk. Even Saul said something similar, a long time ago: Looking into the future of a stock

Good luck to us all in March!

Bear

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” - Attributed to Albert Einstein

Previous Month Summaries

Dec 2016 (contains links to all 2016 monthly posts): Bear's Portfolio at the end of 2016 - Saul’s Investing Discussions - Motley Fool Community

Dec 2017 (contains links to all 2017 monthly posts): Bear's Portfolio through Dec 2017 - Saul’s Investing Discussions - Motley Fool Community

Dec 2018 (contains links to all 2018 monthly posts): Bear's Portfolio through Dec 2018 - Saul’s Investing Discussions - Motley Fool Community

Dec 2019 (contains links to all 2019 monthly posts): Bear's Portfolio through Dec 2019 - Saul’s Investing Discussions - Motley Fool Community

Dec 2020 (contains links to all 2020 monthly posts): Bear's Portfolio through Dec 2020 - Saul’s Investing Discussions - Motley Fool Community

Dec 2021 (contains links to all 2021 monthly posts): Bear's Portfolio through 12/2021 - Saul’s Investing Discussions - Motley Fool Community

Dec 2022 (contains links to all 2022 monthly posts): Bear's Portfolio through 12/2022

Dec 2023 (contains links to all 2023 monthly posts): Bear's Portfolio through 12/2023

Jan 2024: Bear's Portfolio through 01/2024

81 Likes

Bear, I have always appreciated your posts and I respect you as one of the OG’s on this board. So I hesitate to ask, what are you doing? Why are you out of the market and missing the ups on pretty much every stock that Sauldom people hold?

Saul himself points out a number of times that getting out of the market can be the worst decision because none of us can time the market. You post:

"And for many of the above, I don’t even understand in retrospect. If the market is being irrational, it can continue. If I’m being irrational or I’m just wrong, that can also continue. The way I see it, there still aren’t many opportunities. "

That seems to me the very definition of trying to time the market. I do agree with things like prices running up too fast being a ‘warning’, which is why I am leery to add to NVDA over $700. I did once in last couple weeks, and that is proving to me I might have been too early. But ALL THE REST of my position is up since I restarted it. Same with my tiny stock of Soundhound, the AI hype hit way to hard and fast so I pulled money out. I wasn’t timing because I know this is a volatile and tiny company, and my experience shows there will be new opportunities there.

But, it seems you are just washing your hands of the market and sitting out. That is very different from the message on this board.

Am I misinterpreting what you doing? Those ETFs are really catching my eye. I get trying to find a safe place for money, but even I am using things like SHOP and APPL to store money that I could pull for any surprise opportunities, but at least SHOP is growing faster than any ETF and Apple give me a dividend in the meantime I am parking my money there. What would the market have to do to get you back in fully?

(All of this meant with respect.)

52 Likes

Personally I think it’s very much fine - you only need to get rich once - seems like Bear is just waiting for a fatter pitch - at 16x his starting capital at the start of the year, not really a wrong move. He’s also not wrong that many of the holdings on this board are very frothy valuation wise - any change in the tides with interest rates or AI and we could be heading back to 2022 territory

Just think of it as Saul taking money out and not counting it in his normal updates - would venture to guess that over the years that amount is much higher than the 75% in cash/index funds here. Difference is Bear includes it in his portfolio update still, which makes it more noticeable

37 Likes

I think you are misinterpreting. I’m not out of the market. In fact, in order to stay in the market, I’ve resorted to buying index ETFs. I’d rather do that than buy stocks I don’t believe in or concentrate into positions I think are too expensive. Yes, I still have 40% cash, but that means that ~60% of my money is invested (counting the T Bills) and I’m hoping it will be more like 70% soon. Maybe even 80%. I don’t believe in timing the market or “getting out.” I’m just having trouble deciding how I want to be in.

I don’t think there’s anything wrong with index ETFs. In fact, for most people, those who don’t enjoy following companies like we do here, I think they’re possibly the best option. To follow companies, you really have to discern a lot of things – the numbers and also the context/story around them. It takes practice, and in my experience, those who excel at it do so because they really enjoy it. It’s not easy, though, and sometimes really great opportunities are scarce.
(Btw, SHOP and AAPL are both down YTD. That’s just an observation and doesn’t mean much…but in all seriousness, I don’t think they’re a great place to store cash.)

I might get to 70%+ invested soon simply by buying more index ETFs. Or maybe I’ll concentrate more into one of my stocks. Or maybe I’ll find a new one. Stay tuned!

Bear

57 Likes

First of all, I hope Saul is fine, because I haven’t seen him around for a while.

But @PaulWBryant I am confused…

Investing in ETFs, T-Bonds and holding a large cash position is totally valid. But to be honest, in my interpretation, it has nothing to do with Saul‘s investing style.

I just re-read the 1st part of Saul‘s Knowledgebase and it is quit off from the style you choose at the moment.

Don’t get me wrong: it is totally valid and fine to be less risk-tolerant than in the past. Especially keeping in mind, that your portfolio grew tremendously, but being on Saul‘s board, it should be legit to discuss that approach.

There might be a lesson in it for the investors on this board, who are in their earlier years of investing.

We all went through the horrible year 2022 and lost (a lot) of money. But Saul always reminds us, that it is important to follow the numbers (e.g. revenue growth etc.), not valuations and not to time the markets. That if you are (partly) out of the markets, you are in danger of missing the few huge upside days and therefore lack performance. I think that is exactly what happened to you in February. It is your decision, and that’s totally fine, but it is not Saul‘s Investing.

So I think, don’t considering valuations and price anchoring, there are still a couple of companies out there, who are delivering. These are discussed on this board or at least been presented.

I am not a pure play Saul‘s investor, but have a slightly mixed style of investing. I have a hybrid of Saul‘s Style, Social Arb and high risk regarding future trends. That‘s why I don’t share any portfolio updates. But I do have a concentrated portfolio and use the principles Saul describes over-and-over again.

Keeping in mind, it is not a pure play Saul portofolio, my portfolio currently looks like this, just for full disclosure.

Stock Weight YTD
CELH 20.50% 48.33%
IOT 20.45% 5.61%
NVDA 15.08% 22.85%
TSLA 13.05% 0.81%
LUNR 10.19% -16.36%
EOLS 9.95% 23.83%
ELF 6.85% 35.62%
ASTS 1.57% -9.25%
VRNA 0.96% -11.17%

Overall: YTD +21.42%

On top of that, I am leveraged on high conviction positions, but do not discuss these on this board.

Would be very interesting to hear about your views, on where you are on your journey Saul’s Style?

Cheers,
HaikiliKona

33 Likes

Hi Bear,
You are a great investor and a great guy, but it sounds as if you are in shell shock from 2022, and feel you must avoid risk at all cost.

Bear, just look at your compounded results from the beginning of 2017, seven years and two months. You are up more than 17 hundred percent, at more than 18 times what you started with, and that’s in spite of that huge fall in late 2021 and all of 2022. That’s well higher than my 940%, and you got that because you rode your winners, not because you exited at the slightest rise.

You gave the quote “Compound interest is the eighth wonder of the world.” If you think of it as compounded gains are the ninth wonder of the world, even more than all the others, and look at what your gains are, you will realize what you are missing out on, the opportunity cost of what you are doing. Sure the market will head down at some point but you are guessing when.

Best,

Saul

74 Likes

This is exactly what I am not doing. I never said I think the market will go down. I never know. It might be up 30% in 2024 for all I know. That’s one reason I’ve added index funds.

What I am doing, and what I thought I’ve said so much that I was becoming tedious, is only concentrating into positions that I feel are very good opportunities.

So, what would you have me do? Add to positions I don’t really believe in? I don’t see a need to do that. I am managing the same way I always have, allocating the amount I feel good about to each company. Give me a specific company you think I should add to and I’ll happily tell you my thoughts.

Bear

36 Likes

Bear, I’m not talking about taking on positions you are not liking. I’m talking about thinking about compounding gains and being less risk adverse instead of crossing off every company in the universe except two. It means thinking about how you were up 1,730% in a little over seven years even after living through 2022, so you don’t have to keep living in fear of another 2022.

And while you had to grow 1700% to be up 17 times, compounding means you don’t have to grow another 1700% to be up 34 times. All you need is to grow 100% ! And if you grow 200% you’ll be at 51 times of where you started. So why make it so hard for yourself by identifying a bunch of great fast growers but then being afraid to add any of them to your portfolio and watching their gains from the sidelines, and instead selling anything that has gone up some, even, like ELF whose quarterly EPS was up more than 100% from a year ago, and whose revenue was up 85%. It’s almost become a joke between us how you focus on looking to find something wrong about every company so you can justify not buying it. I finished yesterday up over 27% ytd and you finished up 7% plus, not because you didn’t recognize the good stocks, but because you found reasons not to buy almost every one of them.

This is really meant to be a positive suggestion for you, although my tone might not sound gentle.

Best,

Saul

58 Likes

This is an interesting back and forth between two of the best. Love it.

I, unfortunately, found this board at the wrong time…mid-2021, and got annihilated. I was way up for a few months then dumped 55% in 2022, primarily cuz of UPST. I honestly could not take the stress (I have no income) and ending up giving my money to a money manager who proceeded to skyrocket to 15% last year…I’m being facetious.

What I did learn is what to look for in a company and to have rational reasons for investing. So I kept a mere 10% of my money to invest in the companies I still had faith in (most of which I discovered on the board) like CRWD, ZS, MNDY, PANW, DDOG, NVDA, SNOW, AXON, MDB and TTD and added what I could all year. My little portfolio was up 88% last year. If I had the temperament (and the gains over time) of Saul, I could have stood pat and erased my losses from 2022 and been in great shape. BUT I totally understand Bear’s point because the stress of losing so much in 2022 was way more painful than the joy from the gains I had last year. I don’t regret passing my money over because I was far more relaxed not risking my pie. And stress will kill ya.

It’s all about how much risk you can absorb. If Bear is way way up over time, and doesn’t need to max out every penny to live a good life, great. You can’t take it with you. But if you have confidence that time will take care of losses like Saul, great, too.

My biggest regret is that money manage sold most of my NVDA and I had more of that than anything. I considered NVDA a proxy for the tech sector, a more aggressive QQQ. Damn.

33 Likes

I know you mean well, but regarding your suggestion, no thanks. I’m happy with the way I’m managing my portfolio, and I’m not going to change it.

I’m also quite happy being up 7.2% in February. That’s a fantastic month and I’ll take that any day. It doesn’t bother me that you and others are up more, even a lot more. I’m happy for you.

Bear

63 Likes

Amen, brother.

The man has 17 x what he had 7 years ago. He’s already won. Why take unnecessary risks on investments you don’t feel great about if you don’t need to? Just to have even more money?

p.s. - I am shell-shocked - but from 2000 and 2008.

35 Likes

Sorry to pile on, but last year you told us that you weren’t interested in Nvidia because it was too big to 5X or 10X.

But, here you are saying “ELF was a huge opportunity at $93,” but you sell out at $200? Just a double. I’ll note that NVDA has also just about doubled since I started adding in autumn last year.

So I don’t get it - you’re looking for huge opportunities, but when they start working out, you abandon ship?

29 Likes

To borrow from Walt Whitman,

“Do I contradict myself? Very well, I contradict myself!”

I don’t understand the thoughts and feelings behind even my own decisions sometimes, so I’m more than willing to cut others (Bear is on the hotspot right now) some slack

Good luck, and peaceful sleep to us all.

30 Likes

True breakthrough concepts are authored by an inspired genius or by a creative person setting out on a previously uncharted path. Saul may be either, but we should all agree his dogged determination to stay the course has paid off marvelously for diligent followers.

Breakthrough concepts, however, eventually all become the foundation for positive evolution. Evolution authored by someone with an intellectual grasp of the structural strength of the existing foundation. Evolution cannot occur if the foundation is abandoned. Bear has not abandoned the foundation. Additionally, Bear is not diluting the community’s focus by suggesting alternatives for discussion, so we have little understanding of the course he may be charting. Is Bear charting an evolutionary course? Not sure, but my respect means I will follow his commentary with some intensity as it evolves.

Graydrake

44 Likes

I didn’t respond to this a month ago…and I’m afraid that now it will be seen as a victory lap, and that’s not my intention. I just want to explain myself. I’m not prescribing my methods for anybody else, but I do think they work.

I never “bail out” or “abandon ship” for good on a company I like. But I do have an idea what I think they’re worth. I got out of ZS when it was getting expensive (probably too soon), but I was quick (maybe too quick) to jump back in when it came back down to earth a bit. At $5b E.L.F. seemed like a steal to me. At $12b maybe we were closer to paying up for what it’s worth – but also, maybe we were paying for what it will be worth a year from now. I still think it has a great chance to grow into that valuation…but Rome wasn’t built in a day. It’s still a company with ~1b revenue and we’ll see when they give FY guidance if they think they can grow anywhere near as fast as they did this year (or maybe we won’t see…they’ll want to sandbag a lot).

Now that the shares have fallen about 20%+ from the highs, I’ve built ELF back up to a ~7% position.

But ELF has always been a potential holding, because my current belief is that it’s a quality company. ZS too. I’d buy back into CRWD at the right price. But I am not expecting any of these to double in a few months. Or 10x in a year or two. If they did I’d likely trim/sell.

I guess what I’ve said (or at least wanted to tried to say) on this board for a long time now is that job #1 is finding quality companies. I look at Saul’s big positions: ELF, Monday, Axon, Samsara, even Celsius though I don’t own it, and even CRWD though I think it’s expensive. I see quality companies. Also simple and predictable and steady growers. Profitable. Not trying to see into the future but looking at what they’re doing now and expecting it to continue (with reasonable slow downs of course).

I don’t see 20% SMCI, 20% HIMS, 20% BEEM, 20% FOUR, 20% RELY (yes I will gore my own ox, Remitly, which I still own, but less than 2%).

I know I sound like a complete buzzkill or worse a know-it-all. But I think all of us who have been doing this for several years or more know what I mean. I started out reaching for 10xers like a lot of people do. Most failed. Quality companies prove that they are such by putting up great numbers consistently.

Sorry for the rant. I want to see people continue to bring new companies to the board. I think a 1% or 2% position in some long shots can be a great way to learn! But I just hate to see people lose significant money on too-large positions in crappy companies. Whether your portfolio is thousands or millions of dollars, it’s no fun to see it get whacked when a 10% or 15% position gets clobbered never to come back. That happens with crappy companies a lot of times (AEHR, AMPL, etc). It happens with ok companies sometimes (TWLO, BILL, etc). It tends not to happen with true quality companies. They can fall a lot like ELF has this week…but it’s just a bump in the road if they are what I think they are.

Figuring out what our companies are really is job #1. I’d actually like to see more arguing back and forth on all our potentially quality companies. That’s what this board is for: Discussing companies! Being curious and investigative and seeing the pros and the cons for each! Please push back on any of mine if you question their quality, and or their numbers, for any reason!

Bear

98 Likes

I never “bail out” or “abandon ship” for good on a company I like. But I do have an idea what I think they’re worth.

This seems like a good strategy to have a price in mind where you see the company getting overextended on its valuation. Metrics like this can provide a solid intuition for when to add or reduce from a company.

I guess what I’ve said (or at least wanted to tried to say) on this board for a long time now is that job #1 is finding quality companies . I look at Saul’s big positions: ELF, Monday, Axon, Samsara, even Celsius though I don’t own it, and even CRWD though I think it’s expensive. I see quality companies. Also simple and predictable and steady growers.

There’s a lot of quality companies out there but I kind of thought the idea was more to find quality companies which are accelerating or outgrowing their current expectations.

With Monday and Axon are on the very low end of revenue growth, sub 30% projected now and they haven’t really been raising guidance aggressively. With Monday forecasting 25% growth going forward, I’ve decided to sell because I no longer consider it a growth company.

It is a quality company? Sure, just like Datadog and Salesforce are quality companies too. I’d consider Crowdstrike a quality company too, but I don’t see it outpacing general SaaS by a wide margin.

I don’t see 20% SMCI, 20% HIMS, 20% BEEM, 20% FOUR, 20% RELY (yes I will gore my own ox, Remitly, which I still own, but less than 2%).

I know I sound like a complete buzzkill or worse a know-it-all. But I think all of us who have been doing this for several years or more know what I mean. I started out reaching for 10xers like a lot of people do. Most failed. Quality companies prove that they are such by putting up great numbers consistently.

I’m trying to understand what this grouping of companies means to you here? Is it low quality companies overall?

Looking back a year ago, SMCI had a P/E of 6 and revenue growth of 50%+ but the board overlooked it. SCMI is at the forefront a massive secular AI trend where all the data centers need to get rebuilt for accelerated compute.

Are you not interested in this company just solely because of it’s low gross margin? Both bottom line and top are growing massively only this company, faster than any of the consensus “quality” companies.

I want to see people continue to bring new companies to the board.

I have a few new names you could potentially be interested in that are strong on valuation, revenue growth and EPS growth. They are sub 1B market cap companies though just FYI but both have annualized revenue that is higher than market cap. I’m invested in both of them as of recently.

DocGo - DCGO
Energy Services of America Corporation - ESOA

Will get to a write up on these soon, here’s a preview of financials for each,

DCGO

ESOA

I’d actually like to see more arguing back and forth on all our potentially quality companies. That’s what this board is for: Discussing companies!

100% agree with this! The more discussion the better, and more viewpoints gives more insights.

22 Likes

Bear, I’m not going to argue with you. I will point out that Saul used to say that valuation is not important, he paid little attention to it.

Like you, he first looked for quality companies. I remember way back many years ago, 2015 maybe we became aware of a company called Zeltiq, they had developed a weight loss procedure that they licensed to clinics (or something like that, I don’t remember exactly). Several of us (myself included) thought this was a company that could nothing but print $$$. Saul felt differently, he felt that this was not a quality company, probably legal, but close to a scam. At least that’s how I remember it. I don’t know. I do know is that it was not a good investment.

My point is that Saul paid little attention to valuation. I don’t know what his attitude is now.

The upshot of this is that I don’t pay much attention to valuation. I look for growth and I pay attention to the way the top management communicates. If those things are positive, I tend to stay invested. Put simply, I don’t have good criteria for knowing when to sell. I invariably hold my positions too long.

This isn’t just a sad story, I do have an investing question, not about a specific company, but I think valid for the board. I would really like to better understand what your criteria is (are) for knowing when a stock is too expensive? Are you able to articulate that in quantitative terms?

11 Likes

Hi @PaulWBryant I don’t mean to go off topic, but would you be kind enough to go through, step-by-step, how you determine what you think a company is worth? I realize that this process may differ depending on the company; but maybe you could take ELF as an example, and take us through, step-by-step, how you arrive at what you think it is worth please.

I don’t own ELF, and I have no interest in owning it; but I am very interested to learn your process that you go through when deciding if a company is undervalued or overvalued.

Thank you.

5 Likes

Happy to. I merely try to think about reasonable expectations for the next few years. ELF will do probably over 1B this year with a 20%+ net margin (or FCF margin if you prefer). So that’s 200m+ in profit. At a 50 PE that’s a $10b company.

Is a 50 PE too much? Depends what they’ll do the next few years. They’re growing at 75% or 85% now…I don’t expect that to continue. If they grow at even 40% next year for 1.4b in revenue and 280m in profit, even a 40 PE would mean they’re worth $11.2b. Maybe the profit margin improves to 25% aka 350m and a PE of 40 gets you to $14b.

These are all back of napkin type numbers.

You can try out different PEs and different growth rates, but for ELF to be, say, a $20b company, you’d need to assume a lot of growth and or improvement in profit margin. It’s really pretty reasonable to see them getting there in 2 or 3 years. But it’s a large number to put on them today. You’d be paying for a lot of future growth.

Hope that helps.

Bear

31 Likes

My concern is that we’re heading down a path of investing that doesn’t mesh with what we’ve been discussing on this board for several years now.

Instead of finding great companies and profitable business models, we’re now almost day traders on “ok companies” - selling when a stock gets hot and buying back when it’s low. This isn’t just sell ELF at $200 and buy back at $165, it’s sell IOT at $40 and buy back at $30. If range trading is the new thing for this board, then someone should write it up in the knowledgebase, like happened when we moved from 1YrPEG to SaaS, and added recurring revenue as an investing green flag.

I suspect all of us have had the experience of selling out too early and then never being able to get back in, or just not getting in because we couldn’t see the growth through the current metrics and valuations.

If ELF’s ER on May 22 is good-to-great then I’ll view this simply as you getting lucky that you sold before Ulta’s CEO tanked the sector with uncertainty. I didn’t sell, and have taken this dip as an opportunity to add to my position.

35 Likes