If Saul was interested in pure momentum investing, he would have switched to oil and energy stocks long ago. Instead, he picks stocks based on annual sales growth , preferably 30% or higher, and preferably where that growth is more predictable. That’s why he likes SaaS companies. Don’t forget that Salesforce, a SaaS company, had extreme price fluctuations in its early years, but is now a member of the Dow.
Saul has a 30-year track record of delivering 20%+ annualized returns. He’s had multi-year returns that easily beat Peter Lynch’s and Buffett’s returns in comparable periods. Every legendary investor has down years. Buffett has been down more than 50% twice - during 1998-99 and during 2008-2009. Munger used to run his own fund in the 1970’s, but he closed it down after losing more than 50% in the '73-'74 bear market. People who followed Munger and purchased BABA early last year were losing 50% on that investment last October.
The readers of this board have different goals from the readers at Saul’s. Here, people are mostly retired and interested in capital preservation. At Saul’s board, people are largely working professionals in their wealth-building years who are investing money they don’t need for at least 5 to 10 years or more.
Incidentally, Saul actually lays out his criteria for picking stocks at How I pick a company to invest in Please read it. You won’t find the word “momentum” anywhere in it.