Ex-post at Saul’s
I think I’m Done
I used to think this was an opportunity of a lifetime, now I’m wishing I never discover this baord.
https://discussion.fool.com/i-think-i39m-done-35104031.aspx
This is a perfect example of the wrong fight or flight instinct kicking in. It really is difficult to kick the old instinct.
The Captain
On CNBC today, they are saying the same. People are losing patience. Selling their stocks and going to cash.
They say this phase is necessary for a bottom. But will we see more bottoms as the feds announce more interest rate increases for the next month or two (at least).
The bounce yesterday was euphoria. Pros quickly took profits. And today interest rates are up again over 3%. People are selling bonds. Holding cash? Where? Money markets? Dividend stocks?
They say this phase is necessary for a bottom. But will we see more bottoms as the feds announce more interest rate increases for the next month or two (at least).
The Science of Complexity holds that life happens at the edge Chaos and Order.
The life of investors happens at the right edge of the price charts, we can see what happened but not what will happen. It is not enough to understand market forces, the utterances of the defenders of banking malfeasance really screw up the works.
Yesterday: Good day! 
Today: Super crappy day. 
April: Super double crappy month.
May: Good month (so far), up 2.7%.
The Captain
The momentum stocks on Saul’s board go in and out of fashion. You really need to be adept at getting out when the getting’s good.
On the other hand, a long term buy & hold investment in an index fund or even better a vehicle like BRK that shields you from trading costs, unwanted dividend income, and taxes will grow even more over time.
Minimizing the “skim” – the key to retiring early.
intercst
This is a perfect example of the wrong fight or flight instinct kicking in. It really is difficult to kick the old instinct.
First rule of investing is to know thyself. Saul trusts in his method, so he’s comfortable with it. But I suspect many people who were running a concentrated portfolio of similar stocks are know finding out they in fact, are very uncomfortable with it.
People are selling bonds. Holding cash? Where? Money markets? Dividend stocks?
As I indicated yesterday, I’ve moved excess cash to BRK. My taxable dividend income already exceeds my spending, so I’m not looking to make that problem worse.
intercst
This is a perfect example of the wrong fight or flight instinct kicking in
If you have never been punched in the face before by a heavyweight, how can you ever know just how much abuse you can tolerate before you capitulate?
The author of the OP clearly has not been invested this aggressively before (had not previous been in the ring with a heavyweight) and simply investing in the S&P 500 can not prepare one for the volatility found in concentrated growth/tech stocks.
It is not an old instinct to kick, it is an entire new instinct that must be developed - at the worst possible time.
Hawkwin
Vernon Law: Experience is a hard teacher because she gives the test first, the lesson afterward.
It really is difficult to kick the old instinct.
There is another set of instincts that the OP has that many newbies do also:
(1) Thinking that whenever they invest, the markets should go up. The old “Past performance is no guarantee of future results” does not seem to click. He’s basically upset over what is a timing issue. If he had invested in Saul stocks three, or even two years ago, he’d be quite ahead still.
(2) Failure to read. In this case, he very obviously never read Saul’s Knowledgebase (and other informational links) displayed on each of his board’s posts. Saul and others periodically remind people to do that, but many who have taken the board’s picks over a period of months have failed to do that.
Pete
Maybe yes. Maybe no. Some of the Saul picks are down another 15-16% since his capitulation yesterday - with no end in sight. Maybe he will live to fight another day and/or learn to play a different game within his skill set. I hesitate to judge others with nothing more to go on than a few internet posts.
A lesson is repeated until learned.
A man’s gotta know his limitations.
If you have never been punched in the face before by a heavyweight, how can you ever know just how much abuse you can tolerate before you capitulate?
This is what I perceive is wrong with present day America, ‘safety first’ prevents people from learning the realities of life.
The Captain
Maybe yes. Maybe no. Some of the Saul picks are down another 15-16% since his capitulation yesterday - with no end in sight.
Yeah, I don’t see that post as any sign of widespread capitulation/bottoming of Saul stocks.
the guy who posted “I’m Done” says he’s done buying more, but is not selling what he owns. That’s not capitulation, even for this one guy.
most responses were (and recs for): maybe this style isn’t for you, advocate ‘stay the course’ and ‘opportunity of a lifetime’.
There could be a long way down from here. I.e. a couple of Saul favorites getting annihilated today, BILL down 20% at the moment for the day, and NET down 16.5% are down 64% and 70% from their all time highs back in November. But if we compare that drop to Amazon’s drop from its 1999 high to its 2001 low, ~95% drop (almost all the while it was growing like crazy), we can see that to get from a 70% drop to a 95% drop, NET would have to drop another 83%!
Not to say that is what is likely to happen, but it illustrates how ‘irrationally exuberant’ pricing of high quality growth can crater and crater and crater some more even while the underlying company is executing. After the 70% drop, NET is still trading at ~29 times trailing revenue, IINM, and is losing money, so there certainly seems like there’s a lot of room to drop.
More like the sampler dish
If you have never been punched in the face before by a heavyweight, how can you ever know just how much abuse you can tolerate before you capitulate?
Hawkwin,
One of my favorite sayings that circulates on FB around an UFC fighter friend of mine, “everybody’s got a plan till they punched in the face”.
Esp. if you have no idea what you’re doing!