Changing my mind on a dime?

Changing my mind on a dime?

Hi again everyone. I have been accused of changing my mind on BOFI on a dime. Here’s a mild defense:

I’ve been in BOFI for just under three years now. This is not short term trading. I took my initial position at $28. I’ve had plenty of chances to change my mind and didn’t. I added all the way up until about $60 or $70 as I remember. Then, 19 months ago, when BOFI hit $106 I trimmed a little, just because my position was getting too big.

Over the next several months it fell from $106 to $65. That’s a bunch!!! But there was no bad news or threat. (Very different that the current situation). I added a lot from $80 all the way down to $65. That was the FIRST CRASH I stayed in and didn’t change my mind. A slow-motion crash, but a crash non-the less.

It came back up to $133 by about 3 months ago. BOFI was now one of my biggest positions, if not my biggest. Then there was a short-seller attack. The price fell over a period of weeks to about $106 or so. I was a little worried and prudently reduced my exposure, but just by about a third.

Then they got approval for H&R Block and the CEO rebutted the short attack. I added back, on the way up, most of what I had sold at about the same price on the way down. Over a five week period the price went up to over $140. I trimmed a little at $134 and $139. That was TWO CRASHES I had stayed in for.

Then this week there was the lawsuit. The price went from $140 to $99 in a day. I stayed in. The CEO defended but sounded flakey and defensive and couldn’t answer some of the questions. I stayed in and made excuses for him (emotional strain, surprise, etc). The price bounced right back to $119 in a day. That’s THREE CRASHES I stayed in for. I thought it was over.

Then Friday, came the second NY Times article! The straw that broke the camel’s back.

Combined with the lawsuit, my discomfort about the CEO’s responses, and all the questions raised by the short-sellers (who are sometimes right, by the way), I decided I was too uncomfortable and that it wasn’t at all prudent for me to continue to take this risk. I figured another crash was coming during the day, and that a FOURTH CRASH was one too many. I started selling in the morning at $116 and ended up with an average exit price of roughly $110.

Now, if you are a newcomer to the board and think I was just quick to change my mind, you simply didn’t know any of the history.

I advise looking at a six-month daily graph of BOFI’s stock price. You can see a small sell-off from $97 to $88 in July (I added to my position there) followed by a rise to $135. Then from early August to the beginning of September, a big decline over a period of a month (the first short-seller attack), followed by a rise over five weeks to over $144. Then, this week, on Wednesday, on one day, a drop fro $143 or so to $99. That doesn’t look ANYTHING like what any of the other declines look like! In a single day it was much more of a drop than the entire first short-seller attack over four weeks. Then on Thursday, after the conference call, a rise, but less than half-way back, and on Friday, back down. This looks very scary to me, and I’m glad to be out. That doesn’t mean that I’m right, just that I feel a lot safer. When I look at that graph I think it could go Monday to $110, or to $80-$85. I don’t want to play that kind of roulette. JMO. If it goes back up to $110 or $120 I’ll be happy for those who had the courage to stay in, but to me it just doesn’t seem safe.



Saul, thank you for your post.

Although your explanation was appreciated it was truly not necessary. Anyone understanding individual decisions in investing as well as your concern for the CEO’s approach as well as the fact that this was one of your largest positions would understand why you changed your outlook. We also respect that you let us know that you had revised your outlook and felt that your previous position was not right for YOU.

I am a new member of this board but after spending month reading literally every post on this board going back over a year I have immense respect for you but also for countless others that offer some amazing pearls both on life and investing.

We would all hate for this too be spoilt by a couple of individuals who either do not understand the purpose of the board or who do not want to learn the true message of the board: Learning to be a better investor.


Dear Saul,

I for one am sorry to hear 1) that you feel accused, and 2) that you feel a need to offer a mild defense.

Yours is by FAR my favorite board on all of Fooldom. I agree with CRAIGDOC66: your explanation is truly not necessary! And if I can take that thought a little farther, let me add:


With utmost appreciation,
Mr. Sideshow


Now, if you are a newcomer to the board and think I was just quick to change my mind, you simply didn’t know any of the history.

Why did you feel the need to defend your actions???

IMO, members of this board can learn the most from your willingness to let go and not look back. In my observations of investors over the years…their greatest errors come with not letting go…being caught up in the storyline. They ride their failed storylines down to oblivion and create pseudo arguments why they are right and the market is wrong…so many examples with 3D printing being the most obvious in the past year.

In your case, you had enormous risk with such heavy weighting in this one stock…failure to heed a warning would be disastrous to your wealth. Your prior posts defending BOFI would be a natural bias when someone is struggling defending his storyline…one that you had been invested in for quite some time and believed in.

What is unnatural…and a learned investing behavior…is dumping the storyline when it may be broken…the “I am wrong” realization. This lesson can be invaluable to many readers here. Each person comes to acceptance at a different pace…but once one realizes that there are many other opportunities as alternatives…why be so concerned with all then hand wringing??

The epiphany here is…it is OK to be wrong…but never to be rigidly fixated that one is NOT wrong.


the “I am wrong” realization.
If one is going be a successful investor they better get used to being wrong. A lot. It can be very hard to shed the habit of needing to be right all the time.

The object is to make money, not to be right. For instance I could buy stock X, then see the price fall, hang on and sell a decade later for a few cents more than I paid. I would be “right” but would have lost many better opportunities.

One of the smartest people that I have ever met is a poor investor because of that. He is so smart he is accustomed to being “right” almost all the time and he can’t seem to adjust to an endevor where being “right” even 60% of the time is remarkable.

As long as you can do it rationally rather than on gut feelings and emotions, the ability to change your mind on a dime is a very positive talent for an investor. I say a talent because I am not sure that it can be taught. At least not to many.

And let me pile on- anybody who depends on blindly copying the moves of somebody else is headed for trouble. For many reasons.


Like others here, I appreciate your explanation and also feel it is unnecessary. You are not obliged to tell us why, what or when you buy and sell whatever. The fact that you do keep us so informed is very helpful to the learning process. If others consider it a following process they have not received the message.

As you know, I got out of BOFI earlier this year when the stock took a dive and I had issued stop-loss orders. You encouraged me to get back in, but I declined. Mr. Garrabrants is just not idea of leader. My reasons had nothing to do with short attack. They had to do with the way he was rated by his staff on Glassdoor, very damning messages left there. I didn’t want to be invested in company with him as a CEO.

I have no idea if the current NYT articles are valid. It won’t change my opinion of Garrabrants one way or the other. I toyed with the idea of buying calls because I figured BOFI would bounce this week, but I’ve changed my mind. This is just too volatile. It could just as easily go down even more.

Just for drill, I’m still long AMBA even though it’s been cut in half. I’m Long SWKS, SKX, INFN, and others that have all suffered since August. For that matter, I’m still long CRTO even though I know you’re out. I don’t think ad blocker on Safari will mean much. For PCs, it’s still a Windows world. I’ve had an ad blocker for years. Yesterday I searched for airline tix and shortly received an email form a travel website telling me about the great deal they had for the cities I searched. How do you suppose the email got sent? Maybe CRTO had something to do with it - maybe not. I don’t know if they have a way of harvesting email addresses.

In any case my point is I appreciate and learn your very informative posts. I follow many of the same companies you are in, but I don’t follow blindly and I don’t always agree with your decisions. I haven’t yet mastered your analytical skills (I just started following this board this year), I will probably never achieve your level of intuition. You’ve been at this in a serious way for a long time. I have not and I’m already kinda old.

Thanks again Saul. I learn from you and most of the folks who are drawn to this board.


100% agree with the above, Saul. No explanation needed. This is my first post, btw. Please keep doing what you’re doing and follow your own compass. I would really miss all your informative and helpful posts, even though I don’t try to mirror your investment decisions.
Everyone really has to develop their own investment style and strategy, and take responsibility. Keep fighting the good fight! :slight_smile:
BTW, IMHO, once the NY Times gets its teeth into a negative investment storyline, it does not seem to want to let go, and that is bad for BOFI’s share price.



While that was kind of you to provide, you don’t owe anyone any explanation whatsoever for your change of heart towards BOFI. Everyone on this board is a big boy/girl and responsible for his/her own actions and decisions. Anyone who feels otherwise should move to index funds.



While it is clear that Saul shouldn’t feel that it is necessary to explain himself, I think we should not be reprimanding him for doing so since, as usual, he made it into a fine teaching moment. Leveraging off the apparent rapid change of heart based on seeing a few recent posts in isolation, he reconstructed for us the long saga of commitment and question which has lain behind this investment. With that background, it is clear this was no sudden change of heart … which is why, I suppose, I didn’t react to it that way, having listened to the remarks all along. I have had similar experiences with several stocks, some held over many years. Yes with qualifications finally turns into no with one more piece of information.


Well I thank the fellow that wanted Saul to defend his actions since I learned so much more from Saul’s response. Had we not been part of that drama and excitement, who knows if Saul would have taken the time to show us how he thought on this.

I for one am like a deer in the headlights when it comes to selling. The most comfortable position is to “buy and hold” and just HOPE that it isn’t going to be the big one down.

So thanks to the fellow that wanted more, thanks for Saul giving more and also, thanks for a bit of relief from the necessary mental discipline, numbers and forward thinking required of an investor such that I might miss the day’s pleasures.
PS if $100 isn’t a bottom, I may get the courage to dump half my shares…manana

Mykie, If you want to sell but don’t want to commit yourself all at once, sell 10% of your position and invest it in something you feel better about. That way if it goes up, you’ll still have 90%, and if it goes down further you’ll congratulate yourself on your foresight.

glad to see you back on the board,



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WHAT? That !@#$ wrongly accused someone of “changing…dime”. That’s a insult period. He deserves no thanks! You may be entitled to your opinion but damn.

I think this is a bit over the top. Let’s criticize ideas and thoughts, and not cross the line and attack people.

Keep it civil, please.


Hi Saul and Everyone,

I really appreciate getting the opportunity to learn more clearly about how Saul decides to sell a stock, especially one that has been a high conviction holding for some time. That is something that I have done very poorly in the past and I really need to improve in order to get better results. Its probably a carryover from the Buy and Keep Forever idea that is fundamental to TMF.

Thanks so much Saul for clearly describing your thinking.

I sold out of BOFI at $!30 with a stop loss order. I was concerned that it was just going up to fast and was concerned about another drop similar to the ones that Saul described over the last year or so.

I certainly never saw this huge drop coming. Anyway, shortly after the huge drop, I bought back in getting about 22% more shares for the ame money. Not sure what will happen, but I’m back in to see what happens.

One last thought. Not sure a stop loss order is the way to go. The stop loss was at $140, but since it crashed so hard and fast, I actually only got $130/share. I definitely should have just sold when I became concerned.

All the best, Brian