"You sold Shopify in August 2018, and Shopify closed that August at $144.81, and closed May 2021 at $1,242.87 for a return of 758%.
Based on your monthly summaries, your portfolio returns from August 2018 to the end of May 2021 were (1-0.078)(1+0.284)(1+2.333)*(1+0.041) - 1 = 310.7%."
Hi rbgibbons,
Not sure if there is an error in your calculation. I think you are comparing returns of one stock in portfolio (in this case shopify) with returns of whole porfolio of about 10 stocks Saul might have had at that time.
The comparison would have been applicable if 100% of your money (ie whole portfolio) was in Shopify which in most cases would not happen.
Behavior economic had observed that a person becomes risk-seeking when they are losing money, while the same person is actually risk-averse when they are making money. Such a rational irrationality can be addressed by asking yourself a simple question: “If I don’t own this stock, will I buy it?”
However, this question is not powerful enough to cure me so I asked: “Am I comfortable buying more today because I believe the stock is clearly undervalued/under-appreciated?” Often I know the answer is “absolutely no… I will even sell the stock if it bounced back to my cost basis.”
If that’s the voice in my head, it’s time for me to trim (significantly) the holding.
since 2016 ( I think that is when you started to play it?), SHOP is up more than 40X.
It may be true that this could slow down but we don’t really know. Amazon went up more than 3000X in 20 years. But you would never catch those since invariably over 20 years there will be hiccups and bad news on which you would sell out and never look back.
It’s maybe too soon for some to claim that your exit was ‘right’.
When arguing if you made the right decision to sell FSLY, some just reserves more time to make such a pronouncement one way or the other. They may be wrong. You may be wrong. We will see.
thejusticier -
I sure can’t argue with that logic, so I won’t even try.
However, I will point out this board has literally discussed hundreds of companies the last few years. When the main “misses” are an early SHOP exit and a lack of holding AMZN for 20 years, don’t you think it’s possible Saul and others here just might be onto something? Then again, maybe not. As you say, we will see.
All I’ll say is I’m glad I sold FSLY at $90+ and put it into something else the moment the company announced through its very own press release it no longer met the standards for deserving our money (https://investors.fastly.com/news/news-details/2020/Fastly-P…). I must admit that decision has sure made things easier while we wait.
In the meantime, I recently came across a famous quote that says, “Don’t let the perfect be the enemy of the good.” Maybe you can think on that a bit while awaiting history’s final judgement on Fastly.