Crosspost: A Fool's Confession

Investment Analysis Clubs Saul’s Investing Discussions
#6

Do you own the market or just a few stocks? While the economy will suffer and the market will drop, are there no businesses and stocks that you can identify that can benefit from the crisis? – Denny

Three things:

  1. I typically run a concentrated portfolio. 15 is ideal for me but over time I tend to pick up tiny additional positions due to a lack of discipline.

  2. Yes. Some companies will prosper during this time. However, I would rather keep my mind clear and focus on overall my discipline to not buy too early. Therefore, I avoid trying to take advantage of outliers that may seem attractive but don’t necessarily fit my selection preferences. Sorta like a celebration of picking up dimes in front of a steam roller, especially as some of those dimes seem to be a bit stretched in terms of valuation.

  3. My subject is only marginally on topic with Saul’s board. I’d rather not be extending this thread. Thanks for your understanding.

Rob
Rule Breaker / Market Pass / Supernova Starshot Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

#7

Hi Rob,

Today is an example why I can’t, and won’t, do what you did and sell out. My portfolio is currently up 8%, ON THE DAY. It’s up 20.4% from Monday’s close. China had no new cases yesterday in the whole country. The market is starting to realize that this won’t go on forever. The stocks you sold out of (except for TTD, which I sold out of too), are probably considerably up from when you sold. So what do you do? Do you get back in now and take your loss? Do you hope it is a sucker rally and stay out? But then what do you do if it continues on up tomorrow? Do you panic and buy on a short term peak? Or if it drops a few points from here, do you get back in or stay out? and then if it reverses course again?

I can’t deal with all that stress! I just can’t! And if I tried I’d get it wrong. So I stay in high confidence stocks.

Best

Saul

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#8

Oops! While I was typing that my portfolio went from up 8.0% to up 9.5%, and I’m up 22.3% from Monday’s close. I haven’t a clue where it’s going from here and I’m a poor guesser, so I’m staying in.
Sual

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#9

I can’t take it either.

That is why I sold out.

Also why I quit shorting.

I don’t need the bottom. I need clarity. Right now I am pretty sure we will beat this virus. My numbers tell me the USA and Europe are on about the same track as China. (I will know
more this weekend and reserve the right to change my mind)

What I do not know is how much damage this will
do to the economy.

This is unknown. Also, how long will it take to recover. Most importantly, will I have enough to buy boat?

Cheers
Qazulight (They say 70
percent alcohol kills the virus. Ever Clear is 70
percent alcohol. Coincidence? I think not!)

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#10

China had no new cases yesterday in the whole country.

That is inaccurate. In Wuhan province, yes. But in China… 13 new cases yesterday, 34 new cases today.
https://www.worldometers.info/coronavirus/

🆁🅶🅱
For not in my bow do I trust, nor can my sword save me.

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#11

China reported no new domestic cases today, but did report a handful of new cases contracted elsewhere.

https://www.npr.org/sections/coronavirus-live-updates/2020/0…

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#12

Subject: Re: Re: Crosspost: A Fool’s Confession
Author: SaulR80683 | Date: 3/19/2020 1:53:43 PM | Number: 64648

Yes. The portfolio is up today a goodly amount.As it happens I added to TTD 2 or 3 times in the past month. Prices are too tempting and TTD is still a great story.
I also added to my highest conviction stocks many of which overlap those discussed extensively here.

I suspect some folks may have lightened up on TTD to free cash for purchases of such things as ZM,CRWD etc.
I might have done the same .However about 3-4 weeks ago I establish a quite large cash position from whence all my recent purchase have come. I’ve also been dabbling with some newer ideas.These are RB suggestions but nothing worth discussing here.

That is, I believe, the value of raising some cash in advance of an obviously impending storm. As for going to 100% cash I don’t believe I have that intestinal fortitude. And besides my wife wouldn’t let me do it.

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#13

The World-O-Meters is a great site. Look at China’s graph. They are getting out of it. Others will too. I’m personally up 19% since Monday’s close. Have to stay invested. Investing is a decades long process.

https://www.worldometers.info/coronavirus/country/china/

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#14

Saul: Today is an example why I can’t, and won’t, do what you did and sell out.

I was about to post almost the exact same thing, Saul.

When last I looked about 15 minutes ago, I had 12 positions that were up between 10-17% for the day, needless to say, I’m up double digits for the day, and have added a lot on the big down days, too, so up on a larger base. This is how the market can easily get away from someone that tries to time it. Things can change so quickly, just Mon, I posted that I was anxious because of the LARGE (GIANT, really) drop that day (and other big drops previously), but that I was staying the course, buying the companies I like with each leg down.

I’m not saying we hit the bottom yesterday, probably not, just because it would be quite a coincidence for that to happen and for us to be discussing it. I’m sure there will be other big down days, and lower lows, but what if our stocks have another, just decent day, tomorrow? I’ll be up over 20% from the low, in almost every position!

Again, Negative Nellies, don’t jump all over me, I’m NOT calling a bottom, and Market Timers (I’m in, I’m out, I’m in, I’m out), you do see how this could get away from you, right? I don’t recall the stat, but it’s something about a HUGE percentage of gains come from just the 10 best days in the market each year (or whatever period you’re looking at), I don’t want to miss those.

This is not an “I told you so, I’m right” post, because I’m sure you’ll be able to throw it right back in my face tomorrow or the next day when we may be back down to new lows, but, I’m just saying, you can’t time this stuff!

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#15

If you sell out, you have to be right twice — when to sell and when to buy again. I am rarely right once.

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#16

I was fortunate enough to get ahead of it all and went to 70% cash a couple of weeks ago. I knew that things were just getting started when the market started to fall. When everybody was saying that this virus was nothing to worry about - that the flu is worse, I knew we were in for a massive wake-up call. I’ve bought back in on the way down and now I am at 30% cash. My portfolio is actually up 2.1% for the year.

I also feel like there is another leg down. The US is not China. I’ve been reading some stories comparing the US reaction to S. Korea and we are not looking good. We are too individualistic to succeed with the mass mobilization of society that is needed to take care of something like this. It seems likely to me that next week in the US is going to be like this week in Italy.

I have my eyes on shares of DataDog, Alteryx, and Roku. They are already my top holdings, but I want more. My portfolio was up 7.8% today and it was uncomfortable watching the deals that were to be had in these names evaporate in the space of 7 hours. But I’m with Rob, trying to be disciplined and hold on to my cash for the next leg down. I don’t see how we get to Monday without panic getting turned up again.

But look at Roku!!! I remember a lot of people here saying, “It would look good at 100”. Well, now it’s at 73! Look at Alteryx! It’s at 100 again! A few weeks ago I was ready to buy more at 150. If these aren’t great bargains in the long term, I don’t know what is! I’m glad I have the cash to take advantage. Here’s to hoping I don’t get too greedy.

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#17

"I can’t take it either.

That is why I sold out.

Also why I quit shorting."

For those of you on this board and in this thread that have elected to take the position that you have sold out of the market, I would like to personally thank you! I am not questioning your reasons for your decisions because at the end of the day, everyone needs to be able to live a low-stress life and put their heads on the pillow at night for a good night’s sleep.

However, every ying needs a yang and you have thankfully been the “ying” to my “yang”! You have been the “FEAR” to my “GREED” and I mean that in the nicest way. It is simply how the market remains efficient at troubled times like these.

Remember…

BE FEARFUL WHEN OTHERS ARE GREEDY AND GREEDY WHEN OTHERS ARE FEARFUL

Harley

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#18

I have no doubt that Saul’s SaaS companies will weather this recession better than most but I’m very skeptical their stock prices will avoid floating away with the receding tide that leaves many naked swimmers behind. Growth will slow for nearly everyone besides Zoom because when worldwide GDP has a significant decline it’s all but inevitable.

Tourism and hospitality account for more than 10% of worldwide GDP and that is dead for 6 months at least and will face a long slow climb back to current numbers. Other industries are facing steep declines, too. 20%+ unemployment has been mentioned as a very real possibility by our Treasury Secretary.

I sincerely wish everyone the best but I plan on waiting until at least May before I start nibbling.

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#19

Another reason I sold out 3+ weeks ago was I believed everyone in my family plus almost all my in-laws could soon be out of work given that Las Vegas appeared extremely vulnerable. That has come true unfortunately so I’m glad I’ve got a pile of cash and don’t have to be sweating big portfolio losses as well. Nothing would make me happier than to see this situation get swiftly resolved with minimal economic damage and loss of life. I don’t mind missing out on some or all of a bounce if that happens.

As of now my sister and her husband are still working from home since they do software. My wife, me, and one child are out of work, another is a flight attendant and surely soon to be laid off, and the last is a student in her last semester doing online classes since last Monday. Nearly all my in-laws (80-90%) are out of work and it’s a big family so that’s a couple dozen people. Las Vegas has been annihilated.

So my situation is a bit different from most. I’m normally a fully invested stick it out kind of guy (didn’t even flinch in the 2018 near-Bear) but I’m spooked and wanted to preserve cash for a while until I’ve got some visibility about where we’re going.

Again, I genuinely hope I get left in the dust by an epic and sustained stock market bounce back.

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#20

Hang in there NevadaGolfer! You certainly did the honorable thing for your family. When I wrote my post on Fear & Greed, I was doing so to explain a practical axiom of investing with a twist of sarcasm. I should have been more understanding and sensitive enough to foresee that these unprecedented circumstances would be negatively impacting members of our board community. Please accept my apology for my “tone deaf” post. I wish you and your family health and strength as you all persevere.

Harley

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#21

First time writer, long time reader…

So just wanted to throw my $0.02 in from the front lines of the medical field to help anyone trying to decide whether to jump in the market or stay out of the market. Just to disclose, I went 100% cash in my non 401k accounts about a month ago before the huge fallout of our SAAS stocks. I have since nibbled back in to the market (about 30% in market) and bought my favorite AYX back at $80 and CRWD before latest earning report (had a hunch with COUP’s surge after their earning’s report, which I missed out on!). Of course, I wish I bought more but I am still human. lol.

So I work in a medium sized town in the Midwest (about 60k souls) and our hospital’s management has gone full steam ahead in preparation for covid surge. We are normally a 190 bed hospital with 14 ICU beds. With our surge plan we can increase our beds to 310 and have 41 bed ICU unit, with some pretty ingenious use of space. This is unprecedented.

Also in our ER where I work, we have created a covid walk in clinic in our ambulance bay, which we have put an extra 41 chairs there…with the option to put cots out there if needed in the future. Our current ER only has 30ish bed capacity, so we basically doubled our ER “beds”. We are currently testing everyone that comes in with flu like symptoms (finally able to since Monday) that a flu swab has come back negative.

Granted we are doing all this with only 1 positive case so far in our county. As a nurse for the past 20 years, it is breathtaking the extent we are preparing for this. I lived through a lot of the other “bugs” we have had in the past.

Anyhoo…hope this helps with anyone’s decisions on investing. I do think medically this will definitely get worse before its get better. Thank you for letting me go OT!

Happy investing! Saul, please stay healthy and thanks for all you do! God bless.

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#22

After dropping a bomb on this community, I think I need to be responsible and say a bit more:

The market… and life in general… is not always unpredictable in the big scope of things but it often is unpredictable in the little scope of things. To wit, I think the government response to the virus has been stronger than folks expected (not a political statement, it’s bipartisan) and it looks like the market might have a quick initial recovery after all.

So… I’m nibbling my way back in. That will be reflected in my Fool holdings within 24 hours. But I can’t discuss any particular company purchase for two market days. Yeah, that’s inconsistent isn’t it? But I don’t make the rules… :slight_smile:

Take care out there. Show your love to those around you…even though that may include staying away.

Let me share a text exchange I had with a new neighbor yesterday (FYI, we’re in our late 60s):

Anup: Hi Rob, Brenda. This is Anup and Surekha, your neighbors. Hope you are doing great in this Corona emergency. Please let us know if you need any help in buying stuff like groceries etc. To reduce risk for you, we can buy it and put it in your garage, doorstep. You can leave them overnight to kill any virus before taking them in. We are with you in this tough time.

Me: That’s very kind of you two! Thanks! You’re great neighbors. Hope you understand that we’re trying to minimize our outside activity. As it is, we’re doing well (despite cancelled plans to leave for Hawaii tomorrow. LOL) and our daughter has already been getting any miscellaneous stuff we might need. Which hasn’t been much. How are all of you doing so far? By the way, did you see that our wall is now approved? Yay!

Anup: So nice to read that Rob. It’s great that your daughter is taking care. Yup great team work on wall, thanks for taking that initiative. We are doing great, working from home and all kids around. :slight_smile:

Me: Excellent! Take care.

(The wall reference: The I-485 freeway next to our subdivision is being expanded. I reached out to DOT to have a noise wall added since original plans didn’t show our new sub in existence yet.)

Anyway…please remember your neighbors. You may never know what trials and needs they have without asking.

Rob
Rule Breaker / Market Pass / Supernova Starshot Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

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#23

Well, I guess it’s OK to contribute to this OT thread. . .

I would just like to contribute a few words about - mostly about my state of mind since I exited the market about a week ago. So, yes, my state of mind is not a typical investing topic, but maybe it is a little.

[snip] Yeah, I just deleted several paragraphs . . .

I’m not good at “a few words.” More succinctly, we don’t know how the investment community will react when people are dying by the thousand every day. I know, that sounds like hyperbole, it’s not, in fact tens of thousands is not unlikely. More than a million deaths in total this year is not unlikely.

So far, my exit looks like a very expensive mistake. I can live with that. I have not made a permanent exit. I don’t have a re-entry date in mind, and I don’t have precise criteria either. But look, before I started investing with intention I missed out on a lot of gains. That’s most of my life. If I miss out, if we’ve already seen “the bottom” and it’s all gravy from here forward, I will re-enter with less ammunition than if I had done nothing. But my decision was not just a fiscal decision. Health, both mental and physical are more important than money.

Irrespective of your investment decisions, do your best to stay healthy.

I am sleeping more soundly since I went to cash. And, to be totally candid, I’ve made some limited option plays since I exited, but that’s very OT so I’ll say nothing more about it.

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#24

“So far, my exit looks like a very expensive mistake. I can live with that.”

Brittle…nothing is a mistake when it comes to money over your health. You did what you think was best at the time and you could be right in a few weeks/months or wrong. Regardless, so you are watching X at the moment just go up and up, next week it could be the opposite or you could be in hospital. Life. It will be OK, we will get through this, and so will you. Have faith in yourself and protect those around you. It takes some big ones to explain your circumstances in such an honest way.

Best. Bran.

p.s. Sorry Saul. OT perhaps but from the heart. Brittlerock has supplied us with some outstanding posts in the past and will do so again in his/her own time.

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#25

I’ll throw two OT cents out there too

My thought process over the past few weeks was not to try to time any investing moves around when the pandemic is the worst, but when the mass population’s expectations are at their worst. Stock market moves are all about expectations, just as much as actual information/results.

There is no doubt that the grim quantitative numbers regarding infections & deaths associated with this situation are going to look much worse a week or two from now than they do today. But a few days ago when I was hearing people worry that quarantines could go on like this for 18 months, while at the same time seeing how things had already started subsiding in China, made me think that the market reaction may have been overdone and might not get much worse than it was at that point.

I didn’t do anything too major with my holdings in reaction. I did look at some options pricing, but most of the pricing wasn’t very good (e.g. they were priced to expect a relatively soon comeback already), which prompted me to just buy regular common shares of AYX and DDOG when I reduced my TTD stake (although I did buy some 2022 NTNX call options where the pricing seemed like a good risk/reward).

I figured any good news about possible vaccines etc, even if they are still a year away from being mass available, would have more positive effect on the market than any new bad news.

But at the same time, this whole situation is so unprecedented in my lifetime that I didn’t want to put too much of my life savings at unnecessary or outsized risk, considering all the uncertainties, not to mention the losses I’ve already incurred.

I think I made a few good, minor moves, but never felt the need to do anything major, and I have no regrets so far.

Congrats to Rob and those of you that were successful going with your gut and having it work out so well so far.

-mekong

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