I have been actively following Saul and his board. I won’t take the time to dissect and criticize some of the “my portfolio performance” posts, but they are soooo typical of This Time Is Different (not). There is a lot of cherry picking of start times. Saul himself is repeatedly in and out and I think, while he can tell us “I started with $100 and now I have $500,” it is not the result of some buy and hold strategy (and I have no reason to doubt his portfolio growth).
But that isn’t really what’s on my mind. What’s on my mind is something simpler, and deeper. I like the stories being told about these companies: spend a lot to get customers, then slow down just enough to collect profits when the time seems right.
Fine, in principle, but have any of these companies ever done that? Today MNDY is down 28%, but folks on the board say that the market is irrational…sales were a super-percent higher; mission accomplished; stay the course (or buy more on the dip). In the Old World, a P/S over 3 was considered risky. 32? Hey folks, maybe 32 P/S is just not really worth risking 180 clams a share on. If they double sales for for four years (from 300MM to 4.8BB) then they’ll have a P/S of 2ish. That’s a big bet…one that makes the stock worth…what it was worth this morning.
Additionally, these companies have great growth numbers, but they are babies…the whole “industry” is babies. So what? Well here’s so what…the grow at all costs paradigm has never been tested in anything but a frothy market.
When these names are back to where they were in 2018, then maybe they are worth a look…if they existed in 2018. Anybody who has spent even a minute with charts can see the hazard of buying into this market. Of course that hazard has now existed for nigh on 10 years, so who the heck knows.
Just thought food. I will continue to watch the Saul board…I do like the growth and one should never doubt that there is a paradigm shift…but is this it and is it now?
the other red flag…rah-rah pro-invest posts get recs…doubters, questioners, and those who have low expectations do not. Always start reading a board with comments that are at least two years old…three on Saul’s board.