Ok this has to be the bottom. When the whining gets to Saul’s board you know it is the point of maximum pessimism. Now, this is the time to invest. Thank you board.
Andy
26 Likes
I’m almost 60. I had to liquidate my entire retirement account during my divorce two years ago. I started self-directed investing for the first time in my life last year at 58, with a tiny windfall from selling our marital house. I’m down more than 66%.
It’s all relative, is my point. Try to manage your anxiety, and realize that when this market turns around (not if), you’ll still have decades to invest and this experience of hard times to draw on in your decision-making. Grab a refreshment of your choice and try to have some perspective. When I was 33, I was making almost no money, working my way through grad school, and playing in bands. Life is what you make it.
39 Likes
Andy, not sure if you post that in jest, because numerous people have called the bottom on this board, months ago. Many have also complained how much they are down. Saul even commented back in February how well we recovered from those lows. Look at us now. I continue to buy what many consider to be the bottom, only for it to reach a new floor. Certain stocks reaching all time lows.
My point being I’m done buying for now. Done catching a falling knife. Do you think this is a rational market what is being done to BILL, DDOG NET after their earnings? S reaching all time low. SNOW reaching all time low.
All that being said, people must not be reading the whole thread because nowhere did I say I was selling. I am doing very well financially. I just am done buying this dip that has turned into a huge crater.
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My point being I’m done buying for now. Done catching a falling knife. Do you think this is a rational market what is being done to BILL, DDOG NET after their earnings? S reaching all time low. SNOW reaching all time low.
Actually Aln that isn’t what you stated, you never said that you were done buying now, here is what you stated:
I ran out of those funds in Feb. All my new money in my brokerage account has been going to these companies as I continue to catch a falling knife. My father passed away in February and left me a decent sum of money. I added a substantial amount of that money he left me to these companies that have been beaten down the past 6 months. I used to think this was an opportunity of a lifetime, now I’m wishing I never discover this baord. It doesn’t seem to matter what these companies report, they just keep falling in share price.
That sounds like someone who has thrown in the towel.
And
I don’t see any way that happens this year. That might be fine for him, since he was up over 200% in 2020.But for people like me,losing this amount of money has come with tons of anxiety to a very chill guy. So instead of adopting this investing style hoping to retire a few years early, it’s now looking like I’ll be retiring a few years late. Luckily in still only 33 and hope things turn around.
It always feels the darkest before the dawn Aln and this is something that you have failed to grasp with Saul. If you understand your companies and really watch them and study them, than these drops in prices will not scare you. It’s the ones who have been buying stocks because Saul bought them that are going to get scared out right at the bottom. I have seen this before from other members of this board. Back in 2018 people went to cash and lost out on the upside move of the market. In 2020 they went to cash and the market went back up. All of this doesn’t really matter though because this board isn’t here to discuss the macro but individual stocks that we all know are going to come back and go back up. This sort of investing isn’t for everyone but for those who understand and keep looking for the best of the best it can be very profitable.
Andy
27 Likes
You are right Andy, my first post was a little dramatic. It was hot off the heels of BILL and NET earnings. I appreciate everyone’s response here, especially dreamer who reminded me that Saul has been down more than this. Like I said it just hurts more for me because I didn’t have the huge gains before this huge loss.
Once again appreciate everyone’s advice. I know things will get better. I think Saul sometimes frowns on these types of discussions but I think they are healthy. We are all human with lots of emotions.
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I am sorry for all of this board’s denizens big losses this year. With the very deep and clear understanding that market timing / valuation is verboten on this board, I feel compelled to say this:
this crushing, soul-destroying Nasdaq bear market has NOTHING to do with the individual stocks discussed and promoted here. It is NOT about “these stocks”. Something like 70% of individual stock performance is determined by The Market; it gets amplified in both directions by the quality of the companies. Some of the SaaS companies focused on here are among the most impressive growth and profitable enterprises we have ever seen.
There is some major “deleveraging” going on globally now, for whatever macro risk reduction reasons we don’t know about, and its going to stay ugly until whatever that thing is bleeds out.
I’m well aware that does not lessen the absolute despondency some of you are feeling about their 6 month performance. But these companies are not pets.com in 2001.
FC
17 Likes
That’s alright aln, all I can tell you is to follow your companies and find the best of the best. When we go through these down turns it always feels like the end but you are in your 30’s still working. When you feel like this put money to work like crazy, you will be very happy you did. When you feel like you are on top of the world, that is the time to pull some money out and put it aside for times like this. To be in your 30’s, and have found this board, that is something you should truly treasure. The investment advice you are going to get is going to change your life and your families. Hang in there.
Andy
10 Likes
Hi aln,
I sympathize. When I was 33, I was in debt due to bad margin investing but it was my fault and I only blame myself.
My finances recovered through PATIENT and consistent LONG TERM investing…
I am 69 (like RaptorD2) now and am down >60% from Nov 21. You would be truly shocked if I mentioned how much money I’ve lost (on paper)!
Saul’s style of investing has worked great so far (except for the last few months). It’s only a matter of time before the market goes back up.
I like to remind myself that I chose to invest in a concentrated portfolio of growth stocks and really can’t blame this Board and their selfless members.
I still have conviction in the high growth stocks. Today I bought more stocks like Bill.com at bargain prices.
I have enough reserves for a few years and am confident the market will turn around.
As we know, most of these companies are still doing great and there isn’t much wrong with their financials and outlook.
It’s the entire market that’s down. I won’t even blame macroeconomics and their automated algorithmic trading strategies.
Please hang in there and good luck, we are all in this together and many of us are in worse situations.
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this crushing, soul-destroying Nasdaq bear market has NOTHING to do with the individual stocks discussed and promoted here
It has everything to do with the stocks here. NPV = Rt / (1 + i)^t. That is where “i” is the discount rate. The net present value of high growth stocks is lower because interest rates are higher.
1 Like
It has everything to do with the stocks here. NPV = Rt / (1 + i)^t. That is where “i” is the discount rate. The net present value of high growth stocks is lower because interest rates are higher. – ajm
A year ago, the LIBOR was 0.28% and now it’s 2.69%. So, that denominator has changed from 1.0028 to 1.0269
THAT has a miniscule effect for growth companies. A sorta big deal for bonds, but minuscule for growth.
Rob
Rule Breaker Home Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.
”If you are in the right companies, the potential rise can be so enormous that everything else is secondary. Every $1,000 I and my clients put into Motorola in 1957 is now worth $1,993,846 — after all the ups and downs of the stock and of the market…
If I’d sold Motorola because I thought it was overpriced 10 or 15 years ago, chances are I would not have known when to get back in, and I would have missed a tremendous profit. If one of my stocks gets overpriced, I warn my clients that things may be unpleasant for a little while but it will rise to a new peak later.” Phillip Fisher
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Correction:
I wrote: “A year ago, the LIBOR was 0.28% and now it’s 2.69%. So, that denominator has changed from 1.0028 to 1.0269”
I mis-identified the denominator. That value above is the change in denominator EXCEPT for the power (t) is is raised to.
So, instead of minuscule, it is minuscule to a power. Still minuscule for growth.
Rob
Rule Breaker Home Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.
”If you are in the right companies, the potential rise can be so enormous that everything else is secondary. Every $1,000 I and my clients put into Motorola in 1957 is now worth $1,993,846 — after all the ups and downs of the stock and of the market…
If I’d sold Motorola because I thought it was overpriced 10 or 15 years ago, chances are I would not have known when to get back in, and I would have missed a tremendous profit. If one of my stocks gets overpriced, I warn my clients that things may be unpleasant for a little while but it will rise to a new peak later.” Phillip Fisher
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Things could always be worse - I just read that Tiger Global (which is down 44% YTD) has lost roughly $183M every day this year. That equates to losing ~ $28M every hour the market has been open. I know we’re all suffering, but at least we’re not losing $28M per hour - so, we’ve got that going for us…
I also read today (not verified - just a rumor at this point) that part of todays big sell off might have been Tiger Global blowing up and having forced liquidations. FWIW.
Be ready to buy when there is blood in the streets.
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Be ready to buy when there is blood in the streets.
Hard to do when it is YOUR blood.
YR
8 Likes
Warren Buffett has certainly be buying, https://www.usnews.com/news/business/articles/2022-04-30/buf…
1 Like
I understand a post like this can serve as an outlet for pain. Most of the replies essentially carry a similar message. After 34 replies to an OT (but understandable) post, let’s not clutter our board with more replies. If replying to the post helps with your pain, please reply to the author off board.
Thanks for the understanding. May the end of the pain be near.
Cedric
Asst. Board Manager
60 Likes
"I happened to look at Saul's first posts the other day.
He started the board in 2014. I didn't really pay attention here until later in 2017 and early 2018. So I was curious what companies he covered.
Anyway, he mentions in some of the early post his historical returns, and I believe it is the period from 2008 recession until 2012 before he surpassed 2007 highs.
"In 2008, in the big meltdown, I dropped 62.5%, which was pretty terrifying."
+++++++++++++++++++
In the past, I researched Saul's past annual returns as reported in various postings since he started his board
and some postings on other boards before he started his own board.
Saul can correct me if any of these returns are off, but they were taken from past reportings over the years.
The readers can run your own numbers on how these compounded returns add up over the years.
To put things into perspective.
Base on my calculations, If one started with a $10,000 investment on 1 Jan 2000.
Saul's Investment returns (not factoring taxes, etc) as of 31 Dec 2021
would be worth $2,153,529 vs. $52,734 for the Vanguard Total Stock Mkt Index.
% Return in Year.
YEAR SAUL VTSMX (or VTI)
1992
1993 21.4% 10.6%
1994 15.4% -0.2%
1995 43.4% 35.8%
1996 29.4% 21.0%
1997 17.4% 31.0%
1998 4.9% 23.3%
1999 115.5% 23.8%
2000 19.40% -10.6%
2001 46.90% -11.0%
2002 19.70% -21.0%
2003 124.50% 31.4%
2004 16.70% 12.5%
2005 15.60% 6.0%
2006 8.60% 15.5%
2007 22.50% 5.5%
2008 -62.5% -37.0%
2009 110.70% 28.7%
2010 0.30% 17.1%
2011 -14.50% 1.0%
2012 23.00% 16.3%
2013 51.00% 33.4%
2014 -9.80% 12.4%
2015 16.00% 0.3%
2016 2.50% 12.5%
2017 84.20% 21.1%
2018 71.40% -5.3%
2019 28.40% 30.7%
2020 233.30% 20.9%
2021 39.60% 28.5%
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Which of the high growth, little debt, high margin, fcf proud companies that we talk about here do you think are going to go bankrupt?
Sure, some in tech will. But if you believe in the principles on this board and avoid the true mono plays and Elliott wave mythology (or whatever beth kindig and her disciples are “smoking”) I think the risk of bankruptcy might is overblown
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I think you are right to a large extent. People who put their entire portfolio into “Saul Stocks” have gotten crushed, and like you, many did not have years of spectacular growth. We consider these “our” stocks. We do so much research that we think we are really “smart”. But these are not “our” stocks. They are part of the cohort of stocks loved by Kathy Wood, Wall Street Bets, Robinhood investors, etc. When those people invest in Game Stop, we rightfully think they are stupid, but we too had a hidden assumption that as long as your revenues kept growing we would be safe. Well, the mass of investors is done with zero-earning companies no matter the revenues. This will take a long time to change. Sure we will get 20% off the bottom, and that will make us feel good, but not good enough.
Like Warren Buffet says, you don’t know who is wearing swim trunks until the tide goes out, and boy is is low tide.
If you lost 50%, then you have to make 100% to get even. Given the certainty of increasing interest rates, which make future earning less valuable, it will take a long time for “our” stocks to get back to even. Big investors have dropped these stocks like like a bad boyfriend, and unless you have the big boys buying, it is a tough row to hoe.
We need to have a Devil’s Advocate (or group of such) on this board that will assume an intelligent and academic opposition to all positive posts. A challenge to our assumptions and biases. Someone or group that we respect and will not pummel as some bitter outsider just here to make us feel bad or make themselves feel good. But even that probably would not have helped in the giddiness of all the free money we were making.
Pete
27 Likes
So OT. Okay.
But in this thread it seems appropriate.
Some folks prepare for a down market, mentally, emotionally, AND with their money.
Here’s something from Morgan Housel from almost 10 years ago.
https://www.fool.com/investing/general/2013/08/19/what-i-pla…
“Market falls by this much…I invest this much…Historical Frequency”
It’s a plan. Think about that.
I say to you - don’t flinch. Best if you plan for this (a downturn). Stick to your plan. I hear folks saying less SAAS now. Okay, but don’t run to something that doesn’t make sense. My own portfolio has a segment of SAAS. If this makes you rethink your plan (strategy), okay, but make sure you have good reasons for your actions.
Best to all,
Bill
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To a small degree, yes. But almost nobody does an actual NPV calculation on companies like this. And an interest rate change of 3-4% is not materially going to change the growth velocity or the economics of this sector of leading cloud-hosted software companies. Not 70% decline worth. I’m sure that further discussion of this is not desired on this board.
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