It looks like I actually hit it.

Investment Analysis Clubs Saul’s Investing Discussions
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Three weeks ago, in my post called “Stock Market Thoughts”, http://discussion.fool.com/stock-market-thoughts-31253459.aspx I wrote:

I think most of my stocks have now bottomed and are finished with this ridiculousness.

I expressed my reasons for thinking so.

Now, three weeks later, it’s hard to remember how unlikely that seemed at the time. The growth stocks like ours had been pounded for 8 or 9 weeks in a row and it seemed like it would never end. It was like being in a nightmare from which you couldn’t wake up. Any time you had a hope it was quickly crushed. Someone on this board expressed the fear that he’d never recover. One very intelligent poster wrote The bottom hasn’t been hit., and gave a list of reasons why.

Well, three weeks later, it’s pretty evident that it was at least a short term bottom.

Here’s a quick summary of the stocks I mentioned then, in alphabetical order:

AFOP - I said it bottomed 3 months previously at $11.50 and closed that Friday at $18.37. It’s now at $21.41.

AMBA - I said it hit bottom the week before at $22.50 and was currently at $24.05. It’s now at $26.60.

BOFI - had bottomed at $73.50 and was currently at $75.25. It’s now at $79.80.

CALL - Closed at $15.07 that week. I didn’t call a bottom in CALL but said strongly that I didn’t see lots of downside. It’s down another dollar at $13.98.

CELG - I wrote: CELG bottomed 6 weeks ago and has moved up a little every week since. Well it’s up each week since then too.

CSGP - I said it seemed like it was making a bottom at $155-$154. It’s now at $169.50.

HZNP - was at $12.88. I didn’t call a bottom, but it’s now at $14.48

JCOM and KRED - I said they hadn’t sold off particularly and I didn’t say anything about a bottom on either. JCOM is up since then and KRED is down.

MTZ - I said they didn’t have much of a sell-off, but they since pre-announced bad results and I sold out.

P - Had closed as low as $22.20 and closed that week at $23.40. I said I couldn’t be sure if they had bottomed yet, but they are now at $25.60, so I guess they had. I sold out at about $25.10, I think, because of all the new competition.

PFIE - I said it hadn’t sold off much, and that I had been buying to build a position. It closed that week at $3.96. It’s now at $4.15

PSIX - I said it had been trading in a range between $70 and $86 for eleven weeks at that time. Make that 14 weeks.

SCTY - They closed that week at $50.20. I said it was hard to tell if they had bottomed. They closed this week at the same $50.20

SYNA - was at $59.60. I said it just never went down much. It’s now at $67.70

SZYM - had gotten as low as $9.09 and closed the week at $9.20. - It’s now at $10.49

UBNT had gotten as low as $30.50 during the week and was currently $34 and something. It’s now at $37.

WAB had never really sold off. It was a $74.40 when I wrote. It’s a $79.90 now.

Z was at 106, and now its at $118.

It seems that I really did hit it on the nose. As I have said, it was good luck, as there were other times I thought the decline was irrational and out of proportion, but this was the only time I thought it was the bottom strongly enough to actually call a bottom.

Saul

17 Likes
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You did indeed nail it, Saul. Great call.

Which stocks would you put new money into at present?

Jim

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Congratulations Saul.

Amazing accuracy in an arena that is anything but predictable or some might even say, sane and based on honest business fundamentals.

JediG

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It was an ugly pullback, Saul you called the bottom really well. I picked up a few stocks. But I really wish for more cash when those things happen.

I read an article in the WSJ earlier in the year that recommended the following: 85% cash and 15% triple levereged S&P (500?) ETF. The premise being that in an up market the 15% ETF position will let your portfolio match the market return, but you have only a 15% downside. I have not done the math myself and I am leery about back testing and future results… But I have been thinking if it is correct that when you are wiped out in the ETF, which would happen from time to time, you would still have a lot of cash ready to invest.

But knowing when to rebalance would be hard.

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http://stockcharts.com/h-sc/ui?s=Z&p=W&b=4&g=0&a…

http://stockcharts.com/h-sc/ui?s=P&p=W&b=4&g=0&a…

http://stockcharts.com/h-sc/ui?s=GILD&p=W&b=4&g=…

http://stockcharts.com/h-sc/ui?s=CVS&p=D&b=4&g=0… Senior Citizens favourite hang out

http://stockcharts.com/h-sc/ui?s=WAG&p=D&b=4&g=0… ditto

http://stockcharts.com/h-sc/ui?s=$NDX&p=D&b=4&g=… currently bullish

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&b=4&g=… currently bullish

Have fun and see ya around the campus

http://www.crystal-fox.com/index.cfm/Inkwell_and_Quill_Pen_7… “In tribute to all who seek to record their ideas and share them with others” by “Buying from the Scared, Selling to the Greedy”

p.s. http://www.freestockcharts.com/ doesn’t produce charts to be viewed.

2 Likes
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It was an ugly pullback, Saul you called the bottom really well. I picked up a few stocks. But I really wish for more cash when those things happen.

Hi FlyGal,

Yes, I’m usually close to 100% in stocks too but I have a couple of ways I raise cash when things are unreasonably down. I look for stocks I’m holding which are nice slow moving stable stocks, growing, but stably, and which I can sell part or all of to buy something which is way down for no reason. I figure that if the market turns around the stable stocks will go up some, but the beaten down stocks that are rapidly growing will go up lots faster.

An ugly pullback like that also really focusses my attention. There will be some secondary stocks that I had taken small positions in earlier, because when I had looked around at where to put money, my favorite positions were so high I didn’t want to add to them. I’ll sell off those secondary positions too to raise cash to buy really good companies that are way down.

I also cautiously use margin when stocks seem way, way, down. Never more than 3-4% of my total position, but that gives me some cash too.

Best,

Saul

3 Likes
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That seems a good way to come up with cash Saul. I find my emotions interfere with selling, I price anchor. I do not think I could successfully do that yet. Investor know thyself. But from time to time I do use inverse ETFs to hedge. I will be 53 in another month, and I have been doing things the same way for a long time. I want to acquire new skills for my investing. Rule Breakers has been a big change in mindset. Investing in smaller, higher growth stocks. Portfolio management is something I am thinking about but it takes a while to adjust to new ways. I was glad to step up and double my UBNT in the pullback.

Saul I really appreciate how you share you mindset with others. Some lessons I have been learning: Make your own adjustments to GAAP, nothing wrong with high revenue growth, but why bother if they are not earning money? Look where others aren’t- smaller stocks have more opportunity for mis-pricing. I am sure there are some others, but that is what comes to mind now. For me it all started with PSIX, invest in a stock where the earnings are always 2-4 years down the road WPRT, or find a small company in that industry that is making money today! Give me the money maker.

Some day I may be comfortable with a concentrated portfolio of small stocks, but I am not there yet.

As an experiment I have made a second profile so I could try the 15% triple leverage ETF. The difficulty is there is no way to hold cash in CAPS. I thought I could put six money Market funds, but they are not available either. The best I could do is six paired trades that might offset each other. then the 7th position is about 15%. I will be curious how this plays out over time.

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Flygal, The New scorecard lets you set up multiple portfolios with cash included in returns. Seems like you might be able to test your ideas in a fake scorecard portfolio better than in CAPS.

D.