For the first time, I think this board is truly showing signs of herd mentality.
Most of this board was extremely late to invest in Fastly… because Saul hadn’t bought any yet. Then after a bad quarter during a pandemic Saul changed his mind (which I respect) and everyone followed him to the exits.
I know this post will catch some flak, but It’s a bit discourage to see the lack of independent thinking here.
If you sold before the 40% drop, great job. But if you sold after, then you might want to reconsider whether you are an investor or a trend/herd follower.
Why did you buy Fastly in the first place?
What was your thesis?
Has the thesis fundamentally changed?
Did you sell?
When did you sell?
Why did you sell?
If you can answer these questions with your own well laid out reasons then GREAT! You are learning. If you can’t and your answer is because you followed Saul… then that’s not investing.
Saul is a GREAT investor. One of the best I’ve ever known. But there are a lot of companies he sold WAY too early which have continued to compound and outperform the market significantly.
Twilio, Nvidia, Shopify to name a few.
Again, this isn’t to criticize Saul… and it’s not even to make a bull case for Fastly. I’m making a bull case for independent thinking and doing your own analysis vs blindly following the herd.
If you sold before the 40% drop, great job. But if you sold after, then you might want to reconsider whether you are an investor or a trend/herd follower.
Why did you buy Fastly in the first place?
What was your thesis?
Guilty as charged. I had no intention of purchasing Fastly in the first place. Hardware, ugh/yuck. Mediocre Gross Margins, ugh/spit. Price skyrockets and a bunch of smart people bought in so I went against my original judgement and purchased. When the price drop hit I sold out, broke even on the whole deal.
My personal learning is to move slower, much slower when it I’m considering doing something that makes me change my mind from my original decision.
“If you can answer these questions with your own well laid out reasons then GREAT! You are learning. If you can’t and your answer is because you followed Saul… then that’s not investing.”
I think we are all at different levels of ability when it comes to “investing”.
I subscribe to a couple services because I need help with “investing”. I’m not experienced enough to do it on my own. Each of us has differing levels of capability in making our own decisions. It is not an investing sin to rely on input of trusted sources as you formulate your own decisions. In the end, we each make the final choice, and our bank accounts are the final judge of our decision making.
For me personally, I was extremely conflicted about this stock and what to do. I don’t understand the tech, so I am mostly reliant on what other people say about it. I could try to invest dozens of hours to understand it, but my guess is that even that would not be enough. I must rely on input from others. When the experts I trust are not unified, it is a logical decision to decide “when in doubt, get out”.
That is what I ultimately did. I sold my remaining shares today.
I read every post and every piece of info I could find, but I was still unsure what to do. I decided to sell to protect the gains I had so far in FSLY. I also sold some NET because the research I did led me to question the competitive environment for the whole CDN area. (I still own some NET - 3%) It could all be a total mistake, but I feel emotionally better tonight than I have since the FSLY news came out. If I miss out on some gains, I’m mentally ok with that. I am keeping all the proceeds in cash while I try to decide where to re-deploy. I’m light on DDOG so I’m leaning toward that.
I consider myself a hybrid investor-follower. A few of my high conviction stocks, including SHOP, are not discussed much here. And, I do get ideas from following along and learning from the conversation, without being in lockstep with Saul and other’s timing and/or conviction levels (as expressed in position sizes). It is quite generous of him to let us know when he has made a move and why.
The recent lengthy and valuable FSLY discussions on this board bring me to the opposite conclusion as yours: people are willing to think for themselves and to share those thoughts here. And, that is not always easy to do given the stringent rules of the board, which I respect, and which many people hesitate to violate. I imagine there are lots of folks who quietly study the board without chiming in because they don’t wish to be redundant or appear foolish (small f!), and most people don’t publish month-end portfolio reviews. So, we can’t be sure 1) there is a herd and, if there is, 2) what the herd is doing.
For the first time, I think this board is truly showing signs of herd mentality.
Most of this board was extremely late to invest in Fastly… because Saul hadn’t bought any yet. Then after a bad quarter during a pandemic Saul changed his mind (which I respect) and everyone followed him to the exits.
I totally disagree. This time I followed Saul and sold FSLY. Not that I followed his action but his reasoning and acted quickly. So the small loss didn’t become big loss. What I learned is that don’t fall in love with a stock. When the story change, we need to get out. Don’t let the hope dictate our decision. The big rise of fsly is due to the Q2 revenue acceleration. The theory is that will continue. But the preannouncement tell us that will not continue. So the theory is wrong. It’s that simple.
You have to come up with your own process and reasons for owning what you own.
Other people’s research can be helpful, but investing successfully requires some level of your own conviction."
So, what should a novice investor do? Not invest because they can’t have their own complete conviction?
Someone else said this, and it’s a good description. I’m a hybrid. There are some stocks I have high personal conviction in and I have held through a lot of pain because I feel like I understand the business and I believe in it - TMDX, NVCR, GH. (NVCR and GH are not so painful any more. TMDX I’m still holding at a loss.)
There are other stocks in areas I want to be invested in that I have to rely on others’ input for - FSLY, DDOG, CRWD. If one of those has a big drop, I think I’ll go through the same process I went through for FSLY. I’ll gather as much info as I can and try to make a good decision. If I am still unsure, I will probably sell some or all.
seems to me there are three ways only of getting out of a stock on this board
company is doing well, stock is doing well but there is/are a better alternative(s)
company reports bad news that predicts or results in a slow down in growth and the stock crashes and one sells since part of the story is the continous acceleration in growth (not just growth but accelerating growth)
stock and company continue to be succesful resulting in an outsized portion of the overall portfolio so one “trims” the position (this is portfolio management even if portfolio management is supposedly off-topic)
so one should be ready to pull the trigger because of 2 (the other two situations are nice problem to have).
There are a lot of people following these boards. The number of people that don’t post compared to those who post I bet is better then 10 to 1.
Easy to come on the board and add fuel to the fire, and then make the “I sold as well” statement.
There are probably a lot of silent holders of the stock that are waiting to see what their next earnings call brings. What’s the stock still up over 200% YTD?
Me? I sold about 35% of my shares near the high as I just didn’t understand the run up. Sold the rest at 94ish after lowered guidance not because of Sauls call, but some information on Beth Kindig’s board.
I’ve bought back in about a third of my original investment with an average of 78 a share and will add if 72 hits prior to earnings. Otherwise I’ll wait for the quarters results and then decide.
Note. This is all in a tax deferred account. FSLY was never a high conviction stock for me and now in the penalty box and hoping for better news going forward.
If you can answer these questions with your own well laid out reasons then GREAT! You are learning. If you can’t and your answer is because you followed Saul… then that’s not investing.
IMO it is largely Saul’s presence (and investing acumen) here that draws many (of which are numerous lurkers) to this board. If Saul were to abandon this board, herds of blind investors would panic, because they hadn’t taken the time to learn the investing fundamentals that are offered freely here (published on the sidebar, and played out in many threads).
In a way, I’m surprised that TMF hasn’t figured out how to pull the plug here, because, again IMO, this board alone is superior to anything that SA/RB/etc. offers. Why subscribe to inferior offerings when we have the tools here to grow our investing consciousness as a community.
🆁🅶🅱
post tenebras lux For not in my bow do I trust, nor can my sword save me.
Why subscribe to inferior offerings when we have the tools here to grow our investing consciousness as a community.
If you are not a totally involved investor the only way to follow this board is the way Saul tells us not to - just follow him. Most people lack the time, energy and dedication to really dig into what is revealed here, and this isn’t a good place to get spoon fed. Anyone subscribed to Stock Advisor and reads the introductory boards will understand just how lost many first time investors are. This is grad school; a lot of them are starting elementary school. (I started with SA about eleven years ago. SA, RB and other inferior TMF products, and especially the boards (paid and free), changed my life before Saul’s board came along.
Besides, Saul recommends those inferior offerings as incredible bargains!
In a way, I’m surprised that TMF hasn’t figured out how to pull the plug here, because, again IMO, this board alone is superior to anything that SA/RB/etc. offers. Why subscribe to inferior offerings when we have the tools here to grow our investing consciousness as a community.
Despite the “TMF” in front of my username, I am not an employee of the Fool; rather, I am a contractor that works primarily with the members of the Motley Fool One service. As such, my reply is just my reply… not any sort of official Motley Fool response.
With that caveat, I would say that the Motley Fool loves Saul’s board, and in no way wishes to “pull the plug here”. The mission of the Fool has always been to educate investors, and that is the basic premise of this board. The current purpose statement is “To make the world smarter, happier, and richer”. Saul’s mission is pretty darn close to that. In other words, this board is very Foolish.
No danger of censorship or getting shut down. This is a unique and rich corner of Fooldom, and I hope it continues to thrive.
Tiptree, Fool One guide, long on Saul and his board
With that caveat, I would say that the Motley Fool loves Saul’s board, and in no way wishes to “pull the plug here”.
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Ha. They probably get their Best Buy recommendations or even their next picks from here!
Given all the great discussions, I don’t see the herd mentality creeping in.
Like many, my positions are hybrid. I cut back from 46 to 17 stocks since I started reading this board. I still own TTD, SHOP, and TWLO even though many sold out of these positions. First principles thinking: Owning 10-15 stocks and really “knowing” them is what Buffett/Munger and Phil Fisher advocate so I feel like I’m on the right track.
Instead of just following my companies primarily through RB and SA as well as Fool articles and Podcasts I now am much more hands on:
I track every company I own in a spreadsheet that includes all the primary quarterly metrics such as Rev, GM, DBNRR, FCF, etc.
I listen to or read the transcript of each and every one of my companies quarterly earnings calls and I take notes in my spreadsheet. I also compare my notes to those on Saul’s board, thestocknovice’s blog, and seeking alpha.
This board, if anything, teaches one to think for oneself and “really” know the companies one holds, it’s the only way one can justify having a concentrated portfolio and still sleep well at night. I’d be scared sh*tless putting down 10, 15 or even 20% of my portfolio on some stock that Saul owned or somebody told me to buy, without having done my own due diligence and I suspect most folks here feel the same.
This board inspired me to subscribe to Motley Fool Stock Advisor And Rule Breakers.
Saul has said many times that he combs through those two services to find great stock picks
Listen people been mimicking Buffet’s investments for decades. You will always have those that follow great investors.
Saul has proven himself as a great investor. I personally believe his greatest skill are his stock sells. That is a difficult skill to learn.
Time after time I have seen him sell right before a down turn in the stock and reinvest in a better company.
I put a lot of weight on a Saul sell.
I personally have never invested in FSLY. However I have been reading the discussion and I can understand why people have sold recently. It was priced for perfection but the company has not been delivering perfection.
I think the same could be said for ZM right now (which I own). Difference is ZM has yet to stub its toe. If or when that happens the price will decrease dramatically as well.
Mimicking Saul’s moves would result in much better return on investment than just sticking your money in mutual fund.
Patient has cancer. Oncologist discusses the various treatment options and makes a recommendation based on a risk to benefit ratio that matches the patient’s goals and risk tolerance. Patient wisely seeks a second and third medical opinion (after all, this is a life-changing decision). Ultimately, the patient has to make their own decision. BUT, no matter how much the patient tries to educate themselves by reading books, talking with friends and family, and watching YouTube videos, the recommendation made by a person with a 4-year undergraduate degree, 4-year medical degree, 4-year residency, and many other years of disease-specific training and practice will/should be weighted heavily. And when conflicted, would it really be so absurdly unwise to trust the advise of that trained medical professional over your own less informed opinions?
I realize that “expert” opinions are flawed, and “experts” often make mistakes. It is absolutely wise to respectfully challenge and expect and evidence-based retort. If the expert has evidence they will not be offended by the challenge.
Should we make our own investing decisions? YES! Is it wrong when we remain conflicted, even after thoroughly researching a company, to trust that the decision-making of a person (or people) with decades of consistent success is likely superior to our own? I would argue it is not. I will happily follow a herd when the herd is making better decisions (on the whole) than I would be capable of making myself.
I would like to formally thank the herd for presenting the countless evidence-based bull and bear arguments that help me make important financial decisions for my family. My final note is that I feel much better when board members disagree, as it is a demonstration that multiple outcomes have been considered.
because, again IMO, this board alone is superior to anything that SA/RB/etc. offers. Why subscribe to inferior offerings when we have the tools here to grow our investing consciousness as a community.
I disagree. I would put it this way - it is because of the TMF that a group of like-minded independent investors has gathered to make this board a success.
Saul has said in his KB that he gets more confidence if it is an MF rec and subscribes to their services like many here.
Plus lately, we are SAAS focused unlike SA/RB etc. But 5 years from now who knows a different strategy may be needed.
“Why subscribe to inferior offerings when we have the tools here to grow our investing consciousness as a community.”
The Fool doesn’t just sell subscriptions - it does sell advertising, too. If I remember correctly, this board drives a lot of traffic. Also, as an SA subscriber I didn’t feel finding this board was a reason to avoid renewing; if anything, I may drop the SA and go over to RB because it aligns more with my investing interests for now.
I think its great that a post about Herd Mentality gets a ream of recommendations! I used to tell people I was the only student in my high school that wasn’t unique.
So if I make money following Saul, but I don’t learn how to pick stocks as well as Saul, do I have to give the money back?
Lets face it. We all, even Saul, are betting on other people to make us money. Saul doesn’t take his sense of what a business does and then use his money to start one of those businesses. He looks at the stuff he looks at, thinks the stuff he thinks, and then bets on one company and its employees over the others.
I don’t know what Saul does well enough to duplicate it. Will I ever? Probably not. But I do have reason to believe that Saul is better at picking stocks than I am, or than most people, really.
So the Herd can bleat about being independent, and for all I know I will learn why it is valuable to follow the Herd. But as an independent thinker, I bet Saul’s picks will do better than mine.
A few of my high conviction stocks, including SHOP, are not discussed much here. And, I do get ideas from following along and learning from the conversation, without being in lockstep with Saul and other’s timing and/or conviction levels (as expressed in position sizes). It is quite generous of him to let us know when he has made a move and why.