My results, for the doubters!!!!

Investment Analysis Clubs Saul’s Investing Discussions
1

This is really not what our board was set up to discuss, but people are posting such nonsense about what must be happening with my portfolio that I feel obligated to correct them.

Let’s forget about the quite profitable years of 2017, 2018, and 2019. Let’s start with that extraordinary year, 2020. In 2020 alone my portfolio was up 233.3%. That means it was at 333.3% of where I started the year. A triple, and a third of the way to a quadruple.

Then last year, 2021. On Nov 9th, I hit my high, up 93.1%, or 193.1% of that incredible 333.3% of what I started 2020 with. Piled on top of it, so to speak. That 193.1% meant almost a double of that 333.3% of what I started 2020 with. Let’s multiply it and get it exact: 1.931 x 333.3% equals 643.6% (or roughly six and a half times what I had started with less than two years before).

Okay, that up 93.1% didn’t hold, and I finished 2021 at up 39.6%, or at 139.6% of where I started the year. That put me at 465.3% of where I had started 2020, the year before (1.396 times 333.3% = 465.3%). That was at the end of last year.

After today’s close I’m at 53.7% of where I started this year (down 46.3%).

Lest any of you worry about my finances, that puts me at at 250% of where I started 2020, half way between a double and a triple of my entire portfolio. Does that sound like a catastrophe???

For the numerically inclined, 0.537 times 465.3% equals 250.0% from Jan 1, 2020.

And if you would like to go back and count 2017, 2018, and 2019, let’s see, that would be up 84.2%, 71.4%, and 28.4% (as I think I remember, in 2019 the S&P did about as well, or even a fraction better than I did). Okay, 1.842 times 1.714 times 1.284 = 4.054, so I finished those three years at 405.4% of what I started them at.

All right, lets tack those two numbers together to see where I am after all five years:

4.054 times 250.0% equals 1,013.5% !!! So I’m a little over a thousand percent of where I started five years and two and a half months ago. That’s a little more than ten times…

And that’s the after this huge sell-off. So tell me, does this current drastic downturn prove that I’ve been investing all wrong? That I should have been in a S&P index fund and been up a nice safe 90% or so after those five years? Instead of up 913% ??? I don’t think so !

Read the Knowledgebase!

Saul

Links to the Knowledgebase for this board is in the Announcements panel that is on the right side of every page on this board. (It’s in three parts)

For some additions to the Knowledgebase, bringing it up to date, I’d advise reading several other posts linked to on the panel, especially “How I Pick a Company to Invest In,” and “Why My Investing Criteria Have Changed,” and “Why It Really is Different.”

184 Likes
2

And some people are talking about hedge funds, of all things, being at record lows in tech growth stocks.

In 2020, when I was up 233%, and most of the other regulars were also up over 200%, some more than me, some less, but similar returns, the average return of hedge funds was 11.6% (even trailing the S&P’s 16%). If you don’t believe me just google “average return for hedge funds 2020”.

Last year when I was up 39.6%, and the S&P was up 26.9% they were up only 10.4%.

So you have to decide for yourselves whether or not to follow the brilliant hedge fund managers.

Saul

41 Likes
3

Saul, you are a legend. There is no debating that.

The only debate should be that many people, especially the yoounger/newer investors, might not truly understand the risks and the volatitity of this strategy. Is it not fair to try to point out to them more often what might happen??

In other words, if you started your style in October 2007, you would have been down say 80% about 12 months later. Would you have stayed or would you have given up?

If you started your style 5 months ago, you would be down around 60%.

I think a lot of people came to this board in the last 6-12 months. I think a lot of these people are down a lot of money in a very short period of time.

And although you lay out the risks perfectly in the “knowledgebase”, i think people see your results from 2017, 2018, 2019, 2020 etc. and they just assume it will continue forever.

I wonder if there is a way in which the board, as a whole, can be more proactive toward highlighting the risks.

My suggestion would be in the end of the monthly writeups, that people add their 1 or 2 largest drawdowns so new people might understand the risks.

Lets say in Saul’s writeups, in big, bold letters, he writes:

From late 2007 to late 2008 I had an 80% drawdown from top to bottom.

From end of 2021 to today I am currently in a 55%-60% drawdown in 5 months.

I get it. This might be cheesy. It might seem like handholding. It might seem like people should do their own due diligence and read the “knowledgebase” more carefully.

But, it also would highlight the risks more often and more clearly.

Dave

Long and down but hopeful and think the world of Saul

42 Likes
4

Hardly post anymore and it’s understandable and only human nature to be upset with what’s happening at present and I’m sure many are suffering.

However, I just cannot believe the amount of times Saul has begged many not to follow what he does or picks. How many times he has told us that he cannot predict what will happen. Many appear to now want to suck the blood out of him. Not much of that was there the last few years when you all simply(or rather quite a few of you)saw his incredible returns and without doing any DD just put your money into the same stocks he has and hoped for the best.
The trouble is that he and a few others had the insight to pick them up, like am MDB or ZS in 2017/18 in the 20’s and 30’s as opposed to last Nov prices and obviously getting killed now, but that’s no excuse to ask the guy who runs a free board to explain anything to you let alone outlining his returns in the bad years.
Either hang in there and stay the course if you believe in what you invested your money in the first place. Diversify. Go the div route. ETF’s. Financial planner(then you really will know what pain is)or sell. But above all, stop with the griping and moaning. Take matters into your own hands and leave Saul alone. He is not responsible for your issues.
Could it get a lot worse. Sure it can. Could you be run over by a bus tomorrow. Sure it can. Called life, ups and downs. It happens.

131 Likes
5

You have no recommendations left for today. (explain this)

Yes. This is basically a one-line post, but I have no recs left, and I believe Dave - dackerman21 has proposed a reasonable compromise.

Dave proposes:
Lets say in Saul’s writeups, in big, bold letters, he writes:

From late 2007 to late 2008 I had an 80% drawdown from top to bottom.

From end of 2021 to today I am currently in a 55%-60% drawdown in 5 months.

I get it. This might be cheesy. It might seem like handholding. It might seem like people should do their own due diligence and read the “knowledgebase” more carefully.

But, it also would highlight the risks more often and more clearly.

With all the complaining…
Someone described Saul’s as “grad school”. Today, it’s more like POST-grad.

Let alone the “newbies”, I’ve seen handles of people that I know have been on TMF a LONG time, 15-20 years, who apparently stood too close to the hypergrowth flames.

A man’s gotta know his own risk tolerance.
:+1:
ralph

2 Likes
6

The real question is whether 2020 is an outlier. I think it is. In many ways, the circumstances are unique - from panic buying of SaaS products during the pandemic, to the Fed lowering rates to zero and pumping trillions of dollars into the economy.

It’s a myth that any investment method can consistently or even frequently result in 200+ % type returns in a single year. That was a one-off event.

The earlier people realize that, the earlier we can all move on from the denial phase to finally accepting reality and look forward. It’s like the stages of grief : first denial, then anger, bargaining, depression and finally acceptance.

Cats

8 Likes
7

It’s a myth that any investment method can consistently or even frequently result in 200+ % type returns in a single year. That was a one-off event.

My own observation is this: Growth companies are volatile, but beat the ETF’s and SP500 MOST OF THE TIME. Saul publishes his trades. You can follow along and see them. He beat the market MOST OF THE TIME by enough margin to make him a standout performer.

Then towards the end of a bull market, growth works so well that new investors are amazed and those companies become famous for growing “to the sky”. It was the “Nifty 50” in the late 60’s. Tech stocks in 1998-2000. New people pour everything into those names all at once. They see early success, they pour more money in. That is a “blow off top”. A chart of the companies look like the Eiffel Tower.

During 2020-2021.Q3 period Saul and his friends had 200+% gains while Wall Street roosters were crowing about 50% gains.

As I said, growth works MOST of the time. Then things reverse. The people who buy and sell millions of shares at a time pull out or switch to “safer” investments. Now instead of exciting rises, you get inexplicable falls. That’s where we are right now. A rare occurrence.

It will take a couple years for growth as a style to become trendy again. It will take much less time for good companies to continue growing their earnings. They will quietly rise and quietly make their owners wealthy. Thank goodness Saul and his friends know how to recognize those kinds of companies and are so willing to discuss them where I can learn from them.

What did I do:
When I started here, I allocated a portion of my pile for Saul type companies and treated it as if it was my 100%. I was a little less exhilarated on the way up and a lot less pained on the way down. My only mistake was not recognizing the change in winds sooner when the best growth companies were all falling below their 50 and then 200 day moving averages and trimming sooner. I saw the same thing in 2000. For most of the ride, pullbacks were buying opportunities. Once in 10-20 years, they aren’t just pullbacks. It isn’t the companies, it’s what the investment world is doing to them.

14 Likes
8

Two important things:

  1. This is probably a bad time to give up Saul port investing. Saul stocks prices gyrate much more than its underlying “value,” which mostly goes up about 50%/year, year after year. Historically Saul has captured about 29%/year of that value rise into his port, which pretty much means that years that returned much more than 29% must have been followed by years that returned less than 29%. So if Saul’s port just went down 50% or so from 11/2021, even while its “value” rose ~25% during that time, what do you imagine it is going to have to do sometime soon? I’ll give you a hint, you are supposed to buy things when they are cheap and sell them when they are deal, not the other way around.

  2. If you know who Harrison Bergeron is, then you should know that the world has bumps and dangers and is not designed for credulous bimbos to get rich in. The message that this stock sh1t is “dangerous” could be repeated more often, but really, would it actually make a difference if it was? It is repeated more on this board than on any other board I have ever heard of, indeed the BRK board mostly talks about investing BRK stock as safe. Maybe let some of the “oh woe is me I lost all my money” posts to stand to try to clear some of the children off the field who have accidentally wandered on to it, but doesn’t Saul do enough already without having to pretend that another warning per month is going to make a difference?

Thank you for a great board! And get those stocks while they are on sale…

Cheers, R:)

18 Likes