Four years results
You will hear an incessant chatter from know-nothings telling you that no one can beat the averages and that stock picking doesn’t work, and that we will all return to the mean, so I thought that I’d give you a little bit of facts about that. Here are my last four years of results compounded, which you can compare against the S&P. Remember that I’m not just picking my results off the wall. I posted my positions and their sizes every month of those four years so any one who wants to check me out could have done it. It’s real, and others on the board have done approximately the same, some a little better and some a little worrse, but in the range. It can be done, although I strongly doubt that we will ever have another year like this one.
**2017: + 84.2% $100 becomes $184.20**
**2018: + 71.4% $100 becomes $171.40**
**2019 + 28.4% $100 becomes $128.40**
**2020 + 233.3% $100 becomes $333.30**
In four years that multiplies out like this: .
1.842 x 1.714 x 1.284 x 3.333 = 13.511 or 1,351% of what I started with, that’s thirteen and a half TIMES what I started with, or up 1251%. In four years.
During that time the S&P did the following: Up 19.9%, down 6.6%, up 28.9%, up 16.2%, which multiplies out to:
1.199 x 0.934 x 1.289 x 1.162 = 1.677 or 167% of what it started with, that’s not even a simple double, it’s not even close to just a double, it’s up 67% in four years, compared to up 1251%.
Tell me again that active intelligent stock picking doesn’t work! The only ones who say that are the people who don’t know how to do it.
Read the Knowledgebase several times. And the other articles on the side panel. And the posts with lots of recs by people you trust, and you may learn how to do it too.
Great post Maestro. Have learnt so much but what I can’t seem to learn is how you have this physic sense to get out mostly at the right time and use your allocation elsewhere which from what I have seen over the years has worked and worked extremely well for you. My 4 year returns are just over 800% so must be doing something right but what you have is supreme gut instinct and acting upon it very swiftly and not looking back to “what if” and which I’m hoping I can improve upon, but not complaining as still learning.
Thank you for all you do and have done for so many.
And another way to look at the results is CAGR over the past 4 years…
Saul - 91.7%
S&P - 13.7%
So the S&P results have been maybe 50% better than average (using a long term average of 9%), yet Saul beat those better than average results by over 6.5X!
A very special board.
Saul’s board is the only board where you can discuss about growth stocks in a focused manner.
If anyone try to post about growth stocks on regular forums, or how to beat the index. Indexers will arrive quickly and tell you: “Survival bias! You failed to mention countless people who failed to beat the market.”
That’s straw man argument, imagine a engineer teaching engineering at a class then a non-engineering people comes into class and declared: “Survival bias! You failed to mention countless people who failed to become an engineer! So you can’t be an engineer! just give up already!”
Or they’ll say: "I remember a guy mortgaged the house and put all in a stock and lost everything. Why don’t you just do indexing? Do you think you are warren buffett? " Oh, that just stupidity.
They thought I am crazy that one time I wrote I can pick the best 50 stocks out of 500 stocks(SP500) and beat SP500 itself by a margin of around 5% to 10% per year by simply buy and hold. I posted the 50 stocks. There’s almost no interest on that thread. Couple months after COVID lock down, my picks beat the SP500 by few % but still no interest in the thread. 1 or 2 people responded: "Reality is different than theory. You forgot to include trading fee. " (Come on! it’s buy once and hold. $1 each transaction. The fee is so small and can be ignored.) Yes, that can be done. The design of SP500 index is not efficient to maximum return.
Saul’s way just up the return to a new level: beat the index by at least 50% per year.
Kudos to you Saul.
I continue to educate myself with amazing and incredible FREE content from this board. I continue to go back to the Knowledge Base periodically just to reinforce the common threads that run throughout the strategies executed by many of the key members of this board.
I must say and I must admit here publicly, that I had grown a bit lazy when it comes to reading your month end summaries; jumping directly to what I considered to be the “entree” of your post. It wasn’t until you gently reminded/corrected a board member the other day about what made these SaaS companies so special that I was motivated to go back to your last five month end summaries and take the time to read each word and write down the ingredients as well as the recipe rather than just focusing on the entree.
I guess to continue the analogy; anybody can sit down and enjoy an amazing entree, but I think it’s a better life skill and far more rewarding to be able to jump into the kitchen and cook.
Thanks for the incredible impact you and other members of this community have had on the financial well being of my immediate and extended family.
Happy New to All,
wow … kudos to you and your focused methodology. I have learned a lot from you and this board… and what it takes to do to invest wisely.
My heartfelt thanks to you and others on this board.