On PORTFOLIO MANAGEMENT!!!

Investment Analysis Clubs Saul’s Investing Discussions
1

As you all know, our board here is about discussing individual growth stocks. However some people have questions and observations about portfolio management (how many stocks you should have, how many in growth stocks, how to get there, how much in cash, timing the market, etc). These are valid subjects, but they are Off-Topic here, are not appropriate here, and often I simply have to delete them.

However, CMF Swift just pointed out to me that there has been a Motley Fool free board on portfolio management, going for many years. It’s called Portfolio Management, and here’s a link to get to it if you wish to discuss these subjects:

https://discussion.fool.com/portfolio-management-100153.aspx?mid…

Best,

Saul

32 Likes
2

Hello Saul,

Let me thank you for your incredible generosity in hosting this board and the huge amount of work you put into it, totally free of charge. We all benefit from this invaluable gift. So far you have shown remarkable patience with the constant slew of one-liners and irrelevant, off-topic posts. My fear is that one day you’ve had enough, your patience runs out, and you leave us to our own devices. It will be the death of this board. I sincerely hope posters will show you the respect and appreciation you deserve by heeding your rules so you can carry on teaching us.

In my view Saul’s Investing Discussions is your digital home. You are the host, your rules apply. We are only your guests and should behave accordingly. Would any of the posters who blatantly disregard or argue about Saul’s Rules tolerate a guest in their own home who argues with her or him (or the servant) about their specific house rule, such as “No Smoking” or “No Shoes?” I doubt it.

It grieves me that you have to waste your precious time and repeat ad infinitum the rules of your board and have them repeatedly ignored and disrespected despite the combined efforts of you and your assistant board managers as well as several posters who help to limit off-topic posts. Thanks to all who help.

What I have noted (checking the last 99 posts) is that most of the off-topic posters fall into four groups:

  1. newbies who haven’t bothered to check out what the Fool offers,
  2. old-timers who haven’t bothered to read the rules,
  3. old-timers who do not subscribe to the Motley Fool, are not aware of the extraordinary support available on the TMF paid services but feel compelled to answer these off-topic posts, specifically requested to be answered off-board if at all,
  4. non-TMF subscribers who swing by a number of boards contributing very little if any useful information to any of them.

As we (Saul and crew) have discussed before and outlined in For Investing Novices (https://discussion.fool.com/for-investing-novices-34193680.aspx), new investors would definitely benefit from a subscription to The Motley Fool, the company who generously supports this board. Many of the recent off-topic posters don’t seem to know that The Motley Fool paid services offer all the support and information anybody would want on investing, including portfolio management, when to buy or sell, and so on.

There are two paid TMF services focused on rapidly growing companies:

  1. Stock Advisor Service, https://www.fool.com/premium/stock-advisor/
  2. Rule Breakers Service, https://www.fool.com/premium/rule-breakers/

Both services have specific boards devoted to basic investment questions and portfolio management. Their knowledgeable paid staff is very good at responding to specific questions and situations. They will take the time to answer in detail any questions a novice investor may have.

Here are the benefits of a subscription to the TMF services, e.g. Rule Breakers Service:

1. Rule Breakers Guide, https://www.fool.com/premium/rule-breakers/guide/. It includes the following:

Highlights, resources, and how to get the most out of Rule Breakers.
Get Started
Check out our three-step guide to choosing your own Rule Breakers.
Step 1: Get to Know Rule Breakers
Step 2: Invest With Rule Breakers
Step 3: See How You’re Doing

Risk Ratings
Learn how we measure risk and try it yourself!
How We Define Risk
Risk Ratings for All Our Stocks

and much more…, see https://www.fool.com/premium/rule-breakers/guide/

2. Introduction or buy recommendation to a new stock includes the following:
• what it does
• why buy
• buyer’s guide
• key data
• Risks and When We’d Sell
see write up for Guardant Health, https://www.fool.com/premium/rule-breakers/coverage/1069/cov…
• Guardant Health - What Could Go Right (and Wrong), https://www.fool.com/premium/rule-breakers/coverage/1069/cov…

• Buy Roku, Buy Roku, Rule Breakers, 2019-07-11, includes three paragraphs on Risks and When We’d Sell.
https://www.fool.com/premium/rule-breakers/coverage/1069/cov…

3. Paid Discussion Boards
https://discussion.fool.com/4056/premium-boards-10160.aspx:
where paid staff follow the company and will answer any and all questions

To all posters, please respect Saul’s Rules of the Board and don’t expect to be spoonfed, https://discussion.fool.com/rules-of-the-board-34280217.aspx. To all new investors and those new to the Fool, please read “For Board Newcomers,” https://discussion.fool.com/for-board-newcomers-34263032.aspx. Use the threaded function to see if a post has already been answered and don’t use your smart phone to toss one-liners onto this board. Thank you. Your cooperation is sorely needed.

And Saul, thank you again for your invaluable gift.

I. M. Young (one of the assistant board managers)

85 Likes
3

Saul et al,
I want to suggest that you reconsider your position on not discussing portfolio management(PM) for a few reasons.
A large part of our gains has been because of your modified buy and hold and running a concentrated portfolio approach that you champion. This approach is definitely different then most of the views espoused on the link provided to the portfolio management board.
I know that I don’t evaluate any of our high growth companies in isolation.
I’m always thinking about how our companies fit into my portfolio on a relative basis. In fact I’d say much of the value of the monthly post portfolio updates actually has to do with PM. Having said that we should definitely guard against boards to devolving into managing people’s portfolios for them. However I do find great value in considered posts about portfolio management which encompasses much of the art of investing, mastering one’s emotions, evaluating companies, learning when to buy and when to sell, etc.

Before this board got so busy we use to have great discussions about portfolio management. I do think that MANY of the posts about PM that you guys tag as off topic are exactly that. None of us want to manage someone’s portfolio. This isn’t the appropriate place to tell someone to trim 2% off of some position and add it elsewhere. I do think this could be the appropriate place to high level discussions of how many positions, how big is too big, which of our companies might stand up to a pull back.

In many ways I find portfolio management more difficult to master than evaluating a company and I think we can all benefit from each other’s thoughts. Just a few thoughts, I’m happy to abide by whatever you choose.

Best,
Ethan

76 Likes
4

Sorry Ethan but you are talking about an ideal world, where we could talk about the philosophy of portfolio management but not have people saying “I have the following 30 stocks. Which ones do you think I should delete to get down to 25 stocks?”

We now have maybe 10 times, but more likely 20 times the number of posters that we had during the Golden Age that you are referring to. It just would not work and will fill up the board with a myriad of Off-Topic posts like “I reduce risk by using such and option straddles” or “No. it is better to use such and such”, or “It looks like a recession coming so should we sell out?” or “Such and such TV columnist says we should move to cash” or “How many stocks should I have in my portfolio?” or “the X line crossed the Y line and all the analysts say that means we should get out” or “What about bonds?” or “What about dividend stocks?” All of those could be considered part of Portfolio Management. How would you police that?

Sorry, but that is NOT what THIS board is about. If you wish to start a board discussing those subjects, it is easy to do so.

Best,

Saul

57 Likes
5

Ethan,
I hear what you are saying BUT, Saul and assistants can’t do it all. He suggested there for the very reason that “management” is NOT what we discuss here. He and others just cannot get involved in basically telling people how to organize their stocks and has successfully managed through constant daily posters questions as in “what do I do know scenario” with keeping this board on topic.
You know as well as I do that many posters follow(copy) Saul and he has begged people not to follow what he does and do their own DD.
I also find PM difficult to master, however I have learnt to make my own decisions and acted accordingly. It truly has helped me become a better investor through making my own mistakes and trying to learn from them.
This board has given me the fundamental tools and now requires myself and others bringing to the table new Companies that can replicate what we have achieved so far and then innovate, lead and disrupt. Respectfully, I for one just don’t see how Saul has the time or the Inclination to be bombarded with as you said, questions on emotion, when to buy, sell etc. That is purely for another board. But again, it’s all in the knowledgebase that includes what you are asking.
Respectfully. Bran.

14 Likes
6

Ethan,

I have to agree with Saul and the others on this.

Personally, I think that discussions about portfolio management/investment strategies can be both interesting and relevant, they are just not relevant to this board.

Please take into consideration that we already have a very hard time trying to keep the posting on this board somewhat in compliance with the rules that Saul have decided upon.

So, I suggest we have the discussions on the Portfolio Management Board instead. I would be happy to participate there.

Thank you for co-operating.

Benjamin

(Assistant Board Manager)

14 Likes
7

Ethan,

I’d have to agree with Saul here simply because it would quickly spiral out of control. There are just an infinite number of strategies and everyone’s situation is unique.

I think your best bet might be to mention something about your overall thoughts in relation to portfolio and tie that into an end of month type of review/summary. (I.E., like Saul and others do). Since an end of month review kind of ties in the holdings you have and why you have them you can then delve into why xyz represents xx% of your portfolio. You can stay on topic this way.

Let’s face it, we all eagerly await Saul’s end of Month Posts for his insight and thoughts.

Best,
Matt

15 Likes
8

In many ways I find portfolio management more difficult to master than evaluating a company and I think we can all benefit from each other’s thoughts.

I agree. But as Saul keenly homes in on, we just can’t have intimate discussions about everything we’d like to if we were just a dozen people or so – there are hundreds who read this board, maybe more. It’s the price of success, I guess. My take is, the more people on the board, the more each of us need to check ourselves before submitting our posts. I’m not perfect at it, but I try. High quality posts show that the writer has already done work and learned about the company. I’m thinking of posts like:

https://discussion.fool.com/pinterest-a-new-position-34276093.as…
https://discussion.fool.com/my-crowdstrike-crwd-notes-34254973.a…
https://discussion.fool.com/highlow-34251485.aspx
https://discussion.fool.com/estc-and-aws-34247315.aspx

I agree with Matt that monthly portfolio posts can serve the purpose you’re going for. I have a couple times responded with a long post about a company that someone holds a large position in, urging them to consider trimming. I’ve also responded with agreement about a company that I learned about from seeing it in someone’s portfolio – I’m grateful they explained why they liked it, and got me interested. That kind of discussion might be more on topic, but if that’s “portfolio discussion,” we have to treat that as an exception, not the rule.

So, I think the spirit of outlawing “portfolio management” is because so much of it drives us off topic. Saul gives examples:

It just would not work and will fill up the board with a myriad of Off-Topic posts like “I reduce risk by using such and option straddles” or “No. it is better to use such and such”, or “It looks like a recession coming so should we sell out?” or “Such and such TV columnist says we should move to cash” or “How many stocks should I have in my portfolio?” or “the X line crossed the Y line and all the analysts say that means we should get out” or “What about bonds?” or “What about dividend stocks?”

So let’s all try to write quality posts like you do so often, as in the posts I linked above, Ethan. Thanks for all the quality you bring.

Bear

16 Likes
9

Ethan -

I view each monthly summary as a chance to ask these very questions. To the point where Saul specifically wrote in his last recap (https://discussion.fool.com/my-portfolio-and-the-quotendquot-of-…:slight_smile:

“As always, I’d welcome questions or comments on what I did or didn’t do, and will try to respond.” [bolded just as I copied it]

I also wrote this a couple months ago in response to a similar comment from Retirementdough (https://discussion.fool.com/thoughts-on-portfolio-reviews-342210…:slight_smile:

Dough: “As a side note. I wish more posters would post monthly portfolio performance updates. Not to hold the posters feet to the fire. I learn SO MUCH when others share what they are doing and why they are doing it.”

Me: “I wholeheartedly endorse this sentiment. While I’ve learned a lot about individual stocks since finding this board, believe it or not I feel I’ve learned even more about how to allocate and manage my portfolio even though it’s technically off topic. The main source for this education by far has been the monthly recaps others so willingly share. It took me quite a few months to get my portfolio to a place where I felt comfortable posting one myself, but I believe the process of recording my thoughts and then putting them out for public consumption has made me a significantly better investor.”

While I support your general thought, I believe that opportunity already exists every time someone posts a portfolio review. Saul has repeatedly declared those conversations on topic. We just need to take better advantage of them.

10 Likes
10

Hi Ethan,

Thanks for all of the great and interesting posts you bring to this board. I always look forward to reading your thoughts.

I have to agree with Saul on this issue, however. Let’s all do our best to keep the post on this incredible board focused on individual growth stocks, per the “Monday Morning Rules of the Board.”

In the meantime, I enjoy talking about portfolio management, so I am going to start posting and participating in discussions over on the board Saul linked (that board has been in existence since at least 1999!).

For anyone who missed the link to the Portfolio Management board in Saul’s post above, here it is again:

https://discussion.fool.com/portfolio-management-100153.aspx?mid…

Best, Swift…

8 Likes