Certainly a Disappointing Day

Hang with me now. I promise this will get on topic…

This is a disappointing day not just for my portfolio but for the quality of the last 150 or so messages. I can’t remember seeing such a lengthy string of worthless anxiety posts (to borrow someone else’s phrase) even during broad market crashes.

My apologies for cluttering up the board. I just had to get that off my chest.

Please take a moment and re-read that sentence…

You know what’s better than apologizing? Following the etiquette of the board in the first place. Can everyone please keep that in mind?

if you look at the LONG TERM charts of just about every growth stock in tech (subject to survivor bias, sure), you’ll see big drops.

That’s part of today’s posting problem. This board never has been and hopefully never will be about LONG TERM charts. You know why? Because those represent price movements, which are clearly off topic here. Yet here we are with 90% of recent posts basically whining about price moves that didn’t go our way. One of the first lessons to be learned here is to separate company performance from stock price when assessing any business.

Bear just reminded us of that in a post that is rapidly approaching 400 recs - https://discussion.fool.com/if-you-care-about-this-board-3497584… - and yet here we are still swimming in emotional angst a full 30 posts later with several already being deleted.

If anyone needs any additional reminders:

• A note from CompoundingCed on avoiding mindless updates with 162 recs (https://discussion.fool.com/if-you-care-about-this-board-3497584…).

• A post from Saul about empty one-liners (https://discussion.fool.com/can-you-believe-this-34965941.aspx?s…) with 184 recs.

The fact these posts have so many recs means the majority appreciates trying to stay true to the spirit of the discussion. However, a minority seems intent on making it unmanageable for just about everyone else today.

You guys put yourself out there in the forefront with Twitter live discussions, yet don’t want anyone to expect to hear from you when things get a [little] tough?

A somewhat fair statement but one that also lacks considerable context. The Twitter discussion wasn’t because the board was hidden. The discussion was because the author received over a half million views of his original thread which included a link to the board in the comments. He then sought out board members to help answer all the questions he was getting. If you listened to it, the Rules of the Board were stressed repeatedly to those new readers both in the discussion itself and this follow up post: https://discussion.fool.com/welcome-new-readers-34965935.aspx. The Twitter discussion didn’t start the influx of new readers. They were already here. And those new readers aren’t owed anything more than what the board already generously gives to those of us who have been following all along. This is a free board driven solely by the info posters are willing to share. Nothing more and nothing less.

Look, I get it. LSPD, UPST, and (maybe) AMPL have had disappointing earnings. I lost a considerable amount of money as well. No one here is immune. However, any buy/sell/hold decision should be based on what we see in the business performance and not the stock. If anyone has a comment on any of the companies that just reported, fire away. If not, please take your laments elsewhere. They simply aren’t appropriate here.

Now, to practice what I’m preaching: **

LSPD – I already commented on the quarter: https://discussion.fool.com/good-question-hindsight39s-always-20….

UPST - I wanted $250M with a $290 guide with 375K loans. We got 228/255/362. That’s 0-for-3 if you’re counting, so I sold everything I had in non-taxable accounts after hours. I still have a ~1.5% taxable position. For now I don’t want to take the 2020 tax hit given a short-term cost basis of $126. I can always change my mind but currently view UPST as more of a good business than one of my best ideas.

I think part of this is credit is always cyclical (just look at UPST’s 2Q20). Given such an easy money environment, this was a play on riding that business wave as long as you could. That’s the danger of no recurring revenues. And I see it as a HUGE gamble that the auto, small loan, mortgage or whatever S-curves can kick in before the personal loan curve sees either a slowdown or macro pressure.

In fact, I’m beginning to wonder if even the best businesses should be capped at say 10% (for me anyway) if they have ANY kind of exposure to either macro cycles or consumer sentiment. When I think of companies like PTON, ROKU LSPD, or UPST, they have awesome stretches until they don’t. And “don’t” is a lot harder to see coming in these types of names than SaaS companies.

AMPL – I’ve reviewed both the release and call. I feel the general thesis remains intact, but I’m going to stick around 5% for now. We don’t know management’s commenting DNA yet, and there’s a little too much uncertainty in trying to interpret the current Q4 and FY22 guide for me to want to push much higher for now.

** I almost always save what I have to say until the end of the month. On rare occasions, I’ve made exceptions. This is one, just like LSPD. I wouldn’t expect them regularly. Remember, there are no financial advisors here. Only normal people trying their best to run their portfolios. Good luck with whatever decisions you all end up making.

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I’ve debated posting anything because I specifically do not want to clutter the board with any more off-topic nonsense, however at this point I think it needs to be said.
I am not the most active poster but I’ve been following this board for several years. It is very evident that there’s been a large influx of new members over the last year or two, many of whom are either new to investing, or are new to “Saul’s approach”.

Last year was an anomaly. If anyone thinks 100+% returns are normal, then I have a bridge to sell you. I have concerns that many whom have started following this board since 2020 have a warped sense of what would be considered “good” or even “exceptional” returns, and I also feel that expectations are unrealistically high for certain companies. We see a stock being up over 1000% in 1 year and FOMO sets in, and there’s almost a “high” associated with seeing positions continuously marching higher, in some cases 50+% in a month.

UPST is still growing at a blistering pace, but no one in their right mind could expect them to grow 1000% percent Y/Y for any significant amount of time. I saw one poster that was “expecting” $400M in revenue this quarter. I’ve read several other posts over the last couple weeks of people being “disappointed” in companies growing 60% – 70% Y/Y. One post specifically mentioned how 56% Y/Y growth does not “fit their investing thesis”. That is fine, but how realistic is it? I find it interesting that no one seems to care that NET is “only” growing at 50% while the valuation has nothing short of sky-rocketed over the last 6 months; my guess is that’s because NET did not experience a major drop after earnings. Apparently 70% growth is not good enough for some, but 50% is just fine as long as the stock is still going up?

Maybe we all need to take a step back and re-consider what might constitute as “high growth” or “hyper growth”. Should we really be comparing good companies growing at very healthy rates to the few “unicorns” such as UPST over the last few quarters or ZM during the height of Covid?

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