old dealraker makes bold prediction

Stocks A to Z
101

Why would you need to believe a claim when you can verify the results yourself? All you need is a Google sheet or Excel that can do quote lookups and record Saul’s buys and sells in his end-of-month posts at the link I gave above.

I can help you get started. As an example, Saul says that he first bought Twilio (TWLO) in his Jan 2018 update at My portfolio at the end of Jan 2018

In your Google Doc, put the date 1/31/2018 in cell A3 in Column A. In Column B, in the same row, put the stock symbol TWLO. To pull the quote for TWLO for 1/31/2018, enter the following formula in Cell C3.

=index(GOOGLEFINANCE(B3,"price",A3),2,2)

Then cell C3 will populate with TWLO’s closing price on 1/31/2018 which was $26.24.

If you go through his monthly posts, you will find he held TWLO for 21 months (almost 2 years!) and said he sold it during November 2019 at this post My portfolio at the end of Nov 2019

So pull the quote for TWLO for 10/31/2019 using a new row in your spreadsheet, and you will see it closed at $96.56. You can therefore calculate that his return on TWLO was around 264% over this 21-month period. The exact buy and sell dates may be off by a couple weeks on either side, but when you’re holding stocks for multiple years, it’s a good ballpark figure.

To validate the results for his entire portfolio from 2014 through 2022, enter more rows and columns in your spreadsheet for each stock he says he owns in the percentage he says he owns, and record his buys and sells each month.

So his results are easily verifiable, but you need some spreadsheet skills and some hours to put in the work. If you do that, you can convince yourself, and you don’t need to take my word for it or to depend on hearsay and “beliefs”.

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102

You can choose to disbelieve, but Warren Buffett believes. He’s said repeatedly that he could show much better performance if investing millions or tens of millions rather than billions or tens of billions. You just have way more choices, and can be way more nimble, with smaller amounts.

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103

This may not make a big difference. I don’t know. But it does mean you can’t know exactly what his returns have been.

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104

They are not audited returns. I can pick lot of things, but suffice to say, if it works for you great.

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105

[quote=“qazulight, post:92, topic:68048”]
I have been following Saul for some years now. I have lost money and am down at this time. It is not Saul’s method that lost me money, it was my failure to follow the method.[/quote]

Don’t be so hard on yourself. It’s at least partly Saul’s fault. How, you ask? Well I’m glad you asked. It’s because he blithely ignores valuation metrics, or any attempt to introduce them into his “method”. Worse than that, he has methodically purged any discussion of valuation from his board, and limited discussion to a hand selected group of politburo members. This is why I refer to his method as momentum investing.

As long as the price momentum of a four decade long secular bull market was surging, helped by the four decade long secular decline in interest rates, he could jump from rocket to rocket riding its momentum until the fuel sputtered. His willingness to abandon an investment the moment there was a revenue hiccup was the key to his success.

The failure to consider, for even a moment, the mathematical assumptions underlying the purchase of an equity selling at 30, 40, even 60 times revenue was his ultimate downfall. It’s also why he continues to look stupefied at the growth rates of “our great companies” and be flummoxed that their prices continue to decline.

The secular bull is dead. Price momentum investing is dead. We’re in a new period where earnings and valuation will rule investing, as they should. Hopefully the star struck acolytes of Saul and his method will recover, but they won’t do so my remaining committed to the magical thinking behind the “Saul Method”.

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106

You are dancing with the prettiest person in the room and the minute they get a zit, put on a pound or trip over your feet, you find a new dance partner.

Which is exactly why “we” (speaking for the dying caste of Germans with good old business traditions) did learn to utterly hate the British-American way of doing business.

Representative example: The German publisher I worked for most of my IT book writer’s life, Markt&Technik, started as kind of a family business (3 friends actually) and became the largest IT publisher in continental Europe.

Reputation and seeing things longterm always were more important than short-term revenue — until M&T was bought by Pearson Education. From then on it was only about the quarterly results. For the new owners only that did count.

Books were fired out hastily, written with Beta versions of MS Office etc. as before — but now published nearly the moment the final version of the software was available, without chance to thoroughly check with that for changes compared to the Beta version. Unavoidable result: Partly buggy books.

Had not the agreements with t
software companies like Microsoft forbad to publish the books BEFORE the software itself was sold, the books would have hit the shelves without waiting for and any check with the final version.

Reputation? Longterm thinking?

Not any more, not in a capitalism where only the next quarterly result counts.

107

Google Buffett, Peter Lynch, Bogle, Irving Kahn, Sir John Templeton… endless Google pages for any of them.
… the incredible long term returns of the Saul portfolios … would have been thoroughly documented for posterity throughout the annals of the most respected financial journals.

Was my thought too - - - but this comparison has a flaw: Somebody who has such incredible returns as a private person contrary to a fonds manager can go unnoticed, fly under the radar for a long long time (until he becomes worth and invests “too much” to stay invisible).

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108

What was dreadful to watch with the Saul’s bunch was on the downside they’d all sell the stocks that disappointed to buy those yet to disappoint. And it led to over-loaded portfolios of SNOW in the last month and…

…yea good ole SNOW. KaBOOM! At least the last fail of endless fails was a Berkshire “pick” or as we say a “Buffett” (NOT!) stock. Lord we can’t make up stories as good as theses, they come to our door for us to watch free of cost.

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109

I’m not really interested in delving into Saul’s spreadsheets and results, but I am trying to learn something here for future application. Can you explain what the 2,2 does or means? I can’t make any sense of it with any google online sheet instructions. Something to do with column 2, row 2?

110

Yes, it means the cell at column 2, row 2 contains the closing price. If you use GOOGLEFINANCE without the INDEX function, the result is a verbose 2x2 matrix with headings and timestamps.

111

I see the closing price at C3…i.e….row 3, column 3. What I see in row 2, column 2, is nothing (Row 2, B2). It’s empty. What am I missing?

112

Take a look at this screen shot. Note the formula shown for cell C3. The 2,2 in the formula means column 2, row 2 in the output of GOOGLEFINANCE, not column 2, row 2 in the spreadsheet.

Screen Shot 2023-01-05 at 2.47.00 PM

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113

Lost decade chart below (10+ years, negative returns).

In last 40 years, we also had Great Financial Crisis, Dot com bubble. Global pandemic and 6 recessions.

image
image1101×650 60.9 KB

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114

What a call by the Old Dealraker!
Valuations actually matter after all?!
TSLA down about 55% since his prediction…still selling for 35X earnings, 8.75X book, 5X sales. (For those interested in such trivial details.)
Wonder if the folks who “own a ton of Tesla and are buying more on the dip” are still buying? If it looked good at 70X earnings it must look amazing here.

PS I know tesla stock went up in the past so it will go up in the future, got it.

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115

I finally figured it out. If you don’t know what the hell a Google Finance output matrix is, then you can’t discover what is in the row 2, column 2 of that output. I googled it and finally found an explanation of the 5 or 6 or so output headers, attributes, etc, and then focused in on the output in row 2, column 2. If you don’t work with these spreadsheets often, it will be a learning curve. Just looking at a formula isn’t very intuitive until you get into the guts of what each input item in that formula entails and ultimately produces as the end result. Also, =index doesn’t mean much to a layman unless you’re the programmer. Folks who come up with these things are analytically brilliant but they cannot explain things in plain English sometimes. Thank you for the primer.

116

I laughed so hard tears came to my eyes today when Bill Miller (not a fan) ranted on his Tesla short…while touting things he’s lost his rear-end with like Coinbase (ouch), Silvergate (double ouch!), and of course the inevitable must-own by everybody Bitcoin. What a slumlord slam of Tesla…by someone who loves Coin, Silver, and Bit! How much lower can Elon go with the go-go Wall Street hot-shots than this?

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117

You’re welcome, glad it worked out for you.

“My grandfather told me - someday you’ll learn that it’s harder to be kind than to be clever. Being clever is a gift. Gifts are easy - they’re given, after all. Being kind is a choice. … In the end, we are our choices.” - Jeff Bezos

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118

TSLA’s market cap today again is higher than that of BRK.