OT: Shell-shocked?

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OT: Shell-shocked?

The board is really quiet since yesterday’s close and I’m wondering if you all feel as shell-shocked as I feel. I mean, up 6.3% in a single week (my entire portfolio). Up 26% in three and a half weeks since that bottom on July 31st. And my portfolio up just about as much as it was at the end of last year (which was an amazing year) and it’s still August for gosh sakes! Wow! It’s as if the whole world suddenly figured out what we have been doing for the past two years, and has decided to follow our lead.

Can you even remember July 31st, when our stocks had dropped 9% in two trading days (Mon and Tues), and shorts were telling us to sell out and get into cash (or value stocks), when JP Morgan was announcing for the umpteenth time that the Bull Market was over and we should take cover (I presume they were short the market indexes and were trying to support their positions), when people were saying that this line on the graph was crossing that line on the graph and that that always means a recession and market correction is imminent. (That was 26% ago, or more than two years worth of average growth for the S&P behind us). Oh, well!

However, let me caution you all not to get too euphoric with all this good stuff happening. Remember that a correction always, always, is out there somewhere, and a recession too, and not to use margin or other forms of leverage at a time like this (you don’t need it in this market and it can really hurt you quickly on the way down). And for God’s sake, keep adequate living money on the side, out of the market, in case of emergency, and so that you won’t ever have to sell at the bottom of a temporary decline for money to live on.

Meanwhile, enjoy our good fortune, and all the best to you all.

Saul

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Haha, Thanks for the thread.

Yes, I want to SCREEM about how well our portfolio has beed doing lately.

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Saul,

You expressed exactly how I am feeling. Normally when my portfolio is way up and at an all time high I am feeling great about it, obviously. At the end of this week I just feel uneasy. For some reason it just doesn’t feel right. Maybe because it’s gone up so fast.

Your caution that things can change quickly is right on.

On a valuation basis, I’m not seeing anything that is in bubble territory, which is what I am watching out for. When a company is growing revenue at 50%, it can rise 50% and stay at the same valuation.

Jim

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According to record keepers this is the longest bull ever. The economy is doing fine. Unemployment is way down. The asset light digital economy is taking over the world. America has become energy independent. The only problem we have is that we don’t know what comes next and when. To me that sounds like doing more of the same until change comes, probably unannounced.

Talking about shell-shocked, seldom do half of my positions make all time highs on the same day.

Enjoy the ride!

Denny Schlesinger

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For me, its a combination of things. Definitely a big WOW on the stocks. The other big WOW is sending my last to kid to college. I wouldn’t be surprised if there are a few others in this boat. I have been prioritizing my time over this summer with my girl, who is following in my engineering footsteps :o) After this weekend, I plan to be more active on the boards.

For those of you with younger families, it is an awesome feeling to invest well enough to get your child through school debt free. Stick to it, and you have a good chance of achieving your goals as well.

Best,

bulwnkl

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I am probably one of the younger board members; my wife and I just turned 30 and recently finished paying off all of our student loans. I have been very good with finances/budgeting from a young age and we have much more saved than the average millennial our age. We have a personal goal to be completely debt free (only exception being a mortgage) by 2020, and my wife likes to tease me because the single thing I’m most excited about is how much more money I’ll be able to set aside each month for our investment accounts.

I feel extremely lucky to have stumbled across these boards at this point in my career. I’ve still had to learn the hard way, as I’m the stubborn type that always wants to figure something out on my own first, so my returns haven’t been quite as good as many on here, but I still cannot believe how well our portfolio has done compared to something like the S&P over the last couple years.

This post is a little off topic but I really wanted to thank everyone that contributes to this board regularly, and especially Saul for the time and effort he has put in for all of our benefit.

This sounds really cheesy but Saul you have impacted a lot of lives. People pay a lot of money for terrible financial advice or actively managed funds that under-perform the market, and yet I’ve learned more than I could ever imagine by reading free information online.

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Hi Saul!
I’m here and yes I’m feeling safely euphoric
I was tempted to post something about yesterday’s market action with our stocks but I didn’t want to clog up the board with unnecessary posts. I’m trying to behave myself :slight_smile:
Always here and always loyal.
So lucky to have you and this board.
Have a great weekend everybody

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I had a roller coaster the last couple of weeks, and ended up more or less back at the same total. It’s making me think about some trading that involves the volatility index (VIX, VIXY, etc.), which has been bouncing around since early this year after going steadily down for many years. And then I think, “Why drive yourself crazy? Saul has a better and steadier idea.”

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“People pay a lot of money for terrible financial advice or actively managed funds that under-perform the market, and yet I’ve learned more than I could ever imagine by reading free information online.”

I know; we need one of those credit card commercials when they say, “Priceless…”

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For those of you with younger families, it is an awesome feeling to invest well enough to get your child through school debt free. Stick to it, and you have a good chance of achieving your goals as well.

I feel there is hope in paying off my daughter’s 100k Publishing degree that I had no say in and am not expected to help. But currently I have more than I need for retirement. Also have enough safety cash for 5 years. So someday maybe I can rescue her from that terrible mistake.

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…when JP Morgan was announcing for the umpteenth time that the Bull Market was over and we should take cover …

Timely article from Bloomberg: Hedge Funds in Pain Watch Record S&P 500 Rally They’ve Missed

U.S. stocks are vaulting back to all-time highs. But the smart money isn’t celebrating.
Instead, they’re nursing pain. Hedge funds have seen returns dwindling even as the S&P 500 Index marches forward in what has become, by some measures, the longest bull market ever.

How is that even possible? Blame it on a defensive stance and bad-luck bets…Also hurting are their favorite stocks, notably tech giants such as Facebook Inc. that have suddenly stopped working. Meanwhile, their bearish wagers backfired, with the most-shorted stocks jumping for a third week in four.

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Timely article from Bloomberg: Hedge Funds in Pain Watch Record S&P 500 Rally They’ve Missed

U.S. stocks are vaulting back to all-time highs. But the smart money isn’t celebrating. Instead, they’re nursing pain. Hedge funds have seen returns dwindling even as the S&P 500 Index marches forward in what has become, by some measures, the longest bull market ever.

How is that even possible? Blame it on a defensive stance and bad-luck bets…Also hurting are their favorite stocks, notably tech giants such as Facebook Inc. that have suddenly stopped working. Meanwhile, their bearish wagers backfired, with the most-shorted stocks jumping for a third week in four.

What a great find smorgasbord, showing again how trying to time the market can kill your results!
Saul

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Another thank you to Saul and this board. I planned my retirement conservatively, thinking I’d be drawing down my savings the recommended 4% a year. Having discovered this board about the same time I retired, over 2 years ago, my portfolio is producing more “income” than I was making as an airline captain!

I am enjoying building small boats in my retirement, but this change in my portfolio has me dreaming again of possibly having that bigger boat built by local craftsmen. While I’m enjoying the ride I am trimming some more to balance the risk and adding to the CD ladder.

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Over the last three days I just watched my portfolio increase by more than 6-months of mine and my wife’s income combined…I can’t believe that and I’m sure there will be a dip at some point. But wow.

Now up 95% YTD…literally unfathomable for me.

More than the recent results, I’m proud of my (our) ability to not panic when everyone was claiming doom and gloom and the run was over. I watched my portfolio drop by 20-30% and didn’t freak out. In fact, I found a little extra $ I had and invested more. Not because of the drop, but because I was confident in these businesses and wanted to invest more.

I am a bit shell-shocked, but I truly believe we are invested in some of the most innovative, under-valued businesses of our time that are leading the transformation of how business will look in the future.

That’s right I said under valued. Most people claim these stocks are outrageously expensive. However, I think even we are underestimating the future growth of at least 1 of these companies.

Did we ever think Square Cash would pass Venmo? I didn’t…when I invested in Square, Square Cash wasn’t even part of the thesis. They just keep innovating to best serve their customers.

Did we know New Relic was going to launch their Infrastructure product with so much initial success? I didn’t. What will that impact look like long term? I don’t know…certainly can’t value it now.

How about the popularity of Twilio Flex already? What will their new Partner Program mean for their growth in 10 years? I have no idea!

How about all the fear about Alteryx when Tableau introduced their Prep product? This was supposed to compete and crush Alteryx. Tableau is the bigger, more established player. The most recent results, the voice of the market painted a completely different picture. The real one. Tableau is not competing with Alteryx.

What impact will Alteryx’s community have on future growth? THIS is their moat. It can’t be valued by analysts forecasting earnings in 3 months…

Same can be said with Pivotal and Nutanix with their hidden growth transitions. I think Pure Storage is in the same category with them. All impossible to possibly value over the next 5-10 years.

What will The Trade Desk’s “Next Wave” product impact be in 10 years… no clue.

All of that being said with success-bias. This has been a very good stretch for these businesses, I realize that.

I own 11 companies right now. I’m confident over time, I’ll be wrong about 6 of them. But I strongly believe 1 or 2 of them will make up for all of the losses and provide life-changing results. Similar to what Amazon, Netflix, Google, Apple, etc have done for long term investors.

In fact, our lives already have been changed. Because of these boards and my transition to a smaller, focused portfolio, I can really spend time understanding the companies I own.

As a family at 30 years old with two kids, my wife and I are now in a place to move back to our home state of Florida, to exactly the county/neighborhood we want and be closer to family/spend more time raising our kids while they are young and we are young.

Of course, this comes with risks, we will continue to work, but with much more control over how/when we work and much more time to spend together. We’re deciding to realize some of the benefits of our short term investing success (while still living below our means) and enjoy our lives now and in the future.

Getting off topic, so I’ll stop.

Anyways, great week, and thank you!

  • Austin

Shopify (SHOP) Ticker Guide

For information on all of my current holdings view my profile here: http://my.fool.com/profile/CMFAleeb/info.aspx

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Saul: The board is really quiet since yesterday’s close and I’m wondering if you all feel as shell-shocked as I feel.

Rather than shell-shocked, I would describe Friday’s market closings as “stunningly rewarding” especially for 9 holdings in my family’s various accounts that hit all-time or recent 52-week highs on Friday, 8/24/2018 as shown in the table below. I also included my TREX holding that hit its all-time high the same week on 8/21/18.

What’s most astonishing are the price changes for Y-T-D and the recent past 52-week period.


COMPANY	        TICKER	MARKET	PRICE 8/24/18	 PRICE  8/24/18   PRICE CHANGE   PRICE CHANGE
		         CAP	52-wk new high	    Closing	  Year to Date	   52-week
Twilio  	TWLO	7.91 B	   82.78	     81.16	    243.9%	   180.5%
MongoDB 	MDB	3.56 B	   70.85 	     70.23	    136.6%	   119.0% (a)
Amedisys	AMED	3.96 B	  125.10	    124.49	    136.2%	   150.1%
Square  	SQ     32.09 B	   78.47	     78.18	    125.5%	   212.8%
Paycom Software	PAYC	8.85 B	  150.95	    150.94	     87.9%	   107.5%
LHC Group	LHCG	3.12 B	   99.82	     99.47	     62.4%	    57.6%
NetApp	        NTAP   22.03 B	   84.29	     84.24	     54.1%	   122.2%
Trex Co.	TREX	4.75 B	   84.21 (c)	     80.86	     49.2%	   121.4%
Stitch Fix	SFIX	3.72 B	   38.39	     37.98	     41.0%	   150.7%(b)
NVIDIA  	NVDA  165.51 B	  272.81	    272.22	     40.9%	    66.5%

Notes:
(a) based on $32.07 closing price of IPO on 10/19/17
(b) based on $15.15 closing price of IPO on 11/17/17
(c) based on new high on 8/21/18.

Except AMED, LHCG and NTAP, all the others have been introduced and fully discussed at Saul’s board. AMED, LHCG and NTAP are not the high octane revenue growth stocks that are a requirement here and seemingly everybody wants lately, but nevertheless are realizing significant stock price appreciation.

For diversification, I hold a basket of companies in the health care services sector - Amedisys Inc (AMED), LHC Group, Inc. (LHCG) and The Ensign Group, Inc. (ENSG) . These 3 companies have emerged far ahead of the pack in their sector as proven well-run companies that are operating in the black with acceptable revenue growth and earnings, acceptable EV/EBITDA ratios, very low EV/Sales and P/S ratios, acceptable margins, positive ROIC-WACC spreads, adequate positive FCFs, stable capital structures, and very low stock-based compensation/revenue ratios, all of which have enabled these companies to substantially outperform the S&P 500 over the recent 52-week period - AMED up 150%, LHCG up 57.6% and ENSG up 94% - and YTD - AMED up 136%, LHCG up 62% and ENSG 75% as of 8/24/2018. These recent stock price gains have not drastically outpaced fundamental metrics like P/E (I prefer EV/EBITDA) and P/S (I prefer EV/S). For anyone interested, here’s my 7/1/18 post at the New Paradigm Investing board.
http://discussion.fool.com/new-paradigm-health-care-services-sto…

Regards,
Ray

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