Is anyone else unsettled by this daily rise.

Looks great, who can complain. Portfolio increases by 1% every day leaving the S&P in the dust and seeing rises of 4 and 5% per day but at what point is this just irrational exuberance only to be followed by a big fall. I am a big believer in stocks needing to rest and digest and this just seems a little overdone. 15% increases to earnings, 20% drops feels a little like the internet bubble. A little unsettling.

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Is anyone else unsettled by this daily rise?

Oh, I’d have to say that I am too, a bit, but I’m absolutely no good at trying to time these things. If I sold out today, it would keep going for another two weeks, and I’d see the train going on without me and I’d think I made a mistake and buy back in considerably higher than I sold, and then a few days later it would drop 15% and I’d get scared and say “What an idiot I was to get back in!” and I’d sell again. And a few days later it would start back up, but I’d say “I won’t be fooled twice!”, but then a month later a lot of my stocks would be up 20% and I’d worry and think…

Well, you get the idea. I’d rather just worry about picking good companies and not have to worry about when to buy them…and sell them…and buy them again…and sell them again…and

Saul

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Is anyone else unsettled by this daily rise?

A little. Yet I try to keep perspective. Last year I could have reversed that question more than once.

I remember last year Saul frequently made comments about P/E compression. Good companies with good earnings reports were often ignored or even punished, sometimes for multiple quarters in a row! How much of the current good performance is simply natural P/E decompression? I have no clue!

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I share your concern a bit, but I am not about to sell any of my NVDA, SHOP, MELI, AAPL, UBNT, BOFI, or SWIR shares. I do plan to sell my NXPI shares once I hit the 1-year mark in early July to move it to long-term rather than short-term (not that it matters for my present bracket, but more as practice for the future), assuming the Qualcomm purchase still seems moderately likely for $110/share.

What I am trying to do is start to think more about shorting opportunities…although my tool will be simply to purchase puts rather than actually shorting. I bought 3 Staples puts today, with earnings being announced before tomorrow’s open.

Once I get through reading the knowledge base here and maybe search through the post archives a bit more, I plan to try to engage with Saul on some philosophical discussions regarding his thoughts on options. I want to gain more of a background in what he’s stated previously before starting that, however.

I have a theory regarding the degree to which high energy prices (crude oil, in particular) caused the housing bubble to burst (too much money going toward fuel costs likely helped precipitate a decent number of defaults). With crude oil prices remaining quite low for now, compared to 2005-2008, I could see the present bull run continuing for quite a while. I’m not saying necessarily that crude oil would have to get back to $75+ per barrel to end the bull run, but energy is a key component to the production of essentially everything…and crude oil is basically still the most key energy source (with fuel switching becoming more and more versatile, almost all the time). Shale extraction has totally changed the game for the worldwide energy markets.

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One thing you can do is just sit back and enjoy the moment.

Celebrate your patience to hold on this far while many were screaming to get out in 2012, 2014, 2015, 2016 etc…

Celebrate and enjoy the fact that you are able to buy individual stocks and be successful, when many continue to say it is impossible to outperform the broader market.

Cash out a small portion to buy yourself something nice. In my case, I pulled out some funds to pay for a small family vacation…In the event that your portfolio takes a nose dive from here, you at least enjoyed the moment…

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Saul, I have to say SWKS and AMBA were stunningly good experiences for me. Although their quality came to me anyway, their follow-up here was fascinating. However, I am utterly cynical about tech. and (unlike the above companies at the time) even more cynical where simple fundamentals fail (eg CR, cash flow/dil. EPS, some kind of ROIC, director % holdings, short position > 15% etc.)

Thus my holdings currently include HUBS PAYC SHOP SPLK and TTD but to me, like SWKS (which I hold again now) and AMBA, they are rattlesnakes which want to bite me. I am always ready with my 12-bore to blow them out of the portfolio.

You are rather less cynical and do better as a result but I would not want my pf to look like yours! You can sleep with it, I could not.

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Thus my holdings currently include HUBS PAYC SHOP SPLK and TTD but to me… they are rattlesnakes which want to bite me. I am always ready with my 12-bore to blow them out of the portfolio. You are rather less cynical and do better as a result but I would not want my pf to look like yours! You can sleep with it, I could not.

Hi Streina, It makes sense to keep those critters under close surveillance. I remember when I first started reading your posts on other boards you were the ultimate cynic, and found the flaws in every investment. I remember wondering if you were ever able to take a long position in anything. It’s nice that you’ve relaxed a bit, but keep that shotgun ready!
:wink:
Saul

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I’ve been divesting some stocks, taking some short-term capital losses on languishing stocks to offset gains, and buying stocks (or selling puts) when the price looks good. The latter are more turnaround/rebound situations (e.g., Gilead; or retail stocks like Kohl’s, Penney’s, or American Eagle) than pure resumption of growth that would be of more interest to Saul.

(Science fiction scenario - Sears CEO Eddie Lampert and Berkowitz/Fairholme buy a bunch of JCP to hedge their bets, after previously [in real life] buying a bunch of Sears and triggering a bull run that’s now gone away. :slight_smile:

One stock that’s been down for a long time is Nike, a name that hasn’t come up much here, if at all. It’s rare for NKE to stay this low for this long. It seems like a safer, more “boring” play than Under Armour.

Saul, you are right about my being something of a Cassandra. I often feel TMF badly needs someone in the role among the grand procession of brass bands and banners, elephants, cheer-leaders, majorettes and true-believers. And Morgan ‘the market always bounces back.’ Housel (it doesn’t, or not necessarily in your investing lifetime.)

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I often feel TMF badly needs someone in the role among the grand procession of brass bands and banners, elephants, cheer-leaders, majorettes and true-believers.

You are so right. There is rarely a critical word about a company once it has been recommended. It seems that no matter how bad the results, there is always a reminder that “We are long term investors here.” I have to admit that that works a lot of the time, but there are also times when you have to admit a mistake, or if not a mistake, at least an investment that didn’t work out the way you thought it would.
Saul

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