OT: Stick to Your Process

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I tell myself this when the market is down so I want to remind myself of the same thing when the market is up.

Basically, it doesn’t matter what the market does. If we have the guard rails in place with our finances and spending outside of our investment accounts then regardless of how much the market is up or down, we should stick to our process.

That means…don’t sell when the whole market goes down or an analyst cuts a rating on a stock because it’s past their price target and don’t get crazy thinking we need to take excessive risk or make a bunch of trades when the market is up.

90% or more of the time, the best answer is to do nothing and stick to your process.

This was a great week for many of us here. Let’s celebrate our joy of investing and the positive impact it makes on our lives and enables us to make on others’ lives, but stay humble and…

stick to our process.

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“stick to our process”

Fully agree, except sometimes you may rethink your process.

So I’ve done extremely well buying and holding the FAAN stocks the last decade.

I did sell out of FB earlier last year, but starting to nibble bad in.

To date I’ve only allowed myself to allocate my IRA to the names on this board, which is about 25% of my overall portfolio. Not kicking myself for not dedicating the majority of my investment dollars, as I’ve been sticking to my process and looking at risk/reward and more diversification, over going all in on SAAS stocks.

Hindsight? Obvisouly I would have been better served not sticking to my personal process and throwing caution to the wind and going all in on these mega growth small caps.

So the question is, when does one change their process?

I own AAPL, have owned it for 15 years or so. Over that span it’s been a great investment, but as it’s grown it’s naturally slowed. Now it’s become a value stock with a very high market cap. So do I finally change my process and start adjusting that part of my portfolio as I see opportunity present itself.

Personally I view my current holding in AAPL as a market performer at best, so then why should I hold the position? I’d be better off just taking that money and putting it in the SPY index ETF.

Or maybe I’m better off selling the entire position and spreading it into more of the names I already own from this board.

Anyway, lots to think about. The process I’m learning from most of you on this board is making me rethink why I continue to hold stocks like AAPL, when the future appreciation of the stock price seems to be very limited.

Any thoughts appreciated.

Chris

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Thanks for sharing your thoughts Chris. I was actually thinking the same thinking about AAPL and especially AZ this morning. I started my position in November when it was pretty much at its peak. Now still 10% down.

Would it make sense to sell and invest instead in the fast growth SaaS companies?

I just started investing last October and have very limited knowledge. So, any thoughts would be appreciated.

Thanks again for Saul and all of you who make this board such a rich and enriching experience.

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Does Saul own APPL? no
Does GouchoChris own APPL? no
Does PaulWBryant own APPL? no
DreamerDad, TinkerThinker, on and on? nope

Me thinks it is because their are faster growing stocks available if one is to only own 10-12 stocks.
But I am just a grateful lurker. No real stock brain.

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I own AAPL, have owned it for 15 years or so. Over that span it’s been a great investment, but as it’s grown it’s naturally slowed. Now it’s become a value stock with a very high market cap.

Talk to Cobra. He’ll probably tell you that Services is a whole new growth business for Apple. Or maybe 5G will start a whole new phone upgrade cycle. Maybe so, but in my view Services will probably do just a bit more than replace the slowing phone/tablet business. That said, maybe he’s right.

I have a tiny amount; the dividend isn’t bad and there’s always the possibility that the ole’ Apple lighting will strike again (although without Jobs the odds are against it) maybe with their project Titan.

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I still own a few large stocks ie AMZN, NFLX, and MA which help me sleep better at night. Besides MA I do not think these are conservative. I own SHOP, HUBS, NVDA, MELI and ZEN. Stocks which fell out of or were never in favor here. My stocks are in a taxable account which means sometimes I keep stocks I might not in a retirement account. I do own and love a number of the SAS stocks talked about here. I use to have around 65 stocks but only have 19 now. This board has been great in teaching me but I could not own only SAS stocks and sleep at night. I am not nimble enough. But its progress not perfection for me.

Htownrich

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Maybe so, but in my view Services will probably do just a bit more than replace the slowing phone/tablet business.
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I tend to agree with this statement. Unless, Apple shocks me with some crazy innovation…

Apple is a great stock to have in ones portfolio. It has insane cash flow and also an insane buyback program that has reduced the float tremendously the past few years and pays a decent dividend that will grow for the foreseeable future. IMO, it definitely will beat the S&P going forward from today’s levels…

Selling Apple to buy TWLO, TTD, AYX, and others for growth is not a bad idea. The million dollar question is what level of risk are you comfortable with. For me, I can’t just own 10-12 high growth companies. I feel most comfortable with a few high quality companies that pay dividends…

Or put another way, I don’t have Sauls feel on when to buy and sell. I am good at Poker and understand math and the correct play but will never win a World Series Poker championship because I am missing the “it” factor. I don’t have to be awesome to own Apple. It’s as close to a buy and forget as you can get…

Cobra

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“ I don’t have to be awesome to own Apple. It’s as close to a buy and forget as you can get…”

Thanks for the thoughts Cobra.

Unfortunetly a CD or a money market is also a buy and forget as well.

As for beating the S&P, it hasn’t kept up to the S&P YTD, and maybe for the last year, but I have to look. So going forward? We shall see.

It really feels like dead money to me. I may start moving those funds when I see opportunities thst make more sense going forward.

Chris

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"Thanks for sharing your thoughts Chris. I was actually thinking the same thinking about AAPL and especially AZ this morning. I started my position in November when it was pretty much at its peak. Now still 10% down.

Would it make sense to sell and invest instead in the fast growth SaaS companies?

I just started investing last October and have very limited knowledge. So, any thoughts would be appreciated.

Thanks again for Saul and all of you who make this board such a rich and enriching experience."

At the end of the day, you have to know what you are comfortable with. I started investing in May, and I enjoyed the bull run up, but then it collapsed and I freaked out. For reference, I only had one stock, $SQ and I had 100k in it. I felt like superman when it went to 100+ and felt like crap when it dropped to 70s in October.

I came on this board seeking help because I dunno, I was gambling, and I really didn’t understand the meaning of investing. You can read my post history. I was a wreck in October.

But there was some people on here that gave some great advice. If you read the FAQS on the right side of the board, Saul really goes into depth on buying and holding long and what he sees as a good investment.

I tried his method, and I made good returns, but for me…having my portfolio go through some ugly ping pong swings made me readjust my allocation to some “safe” dividend stocks like V, MA, Cost, Sbux while also buying into some of these high growth names like SQ, AYX, TWLO… Some people just go all high growth. Some people play into REIT’s Mutual Fund and maybe 5-10% speculative growth. Who knows. Who cares.

Today, I missed the boat on TTD. I bought that thing at 100…and I sold at 140 because for me, I couldn’t sleep at night with a ping ponging portfolio.

So the bottom line, is you have to know what you are comfortable with. And unfortunately Wall Street is NOT nice in teaching life lessons. A life lesson that I learned was that if I had just held everything through Dec…I would be easily up 50% or more…and I find myself wishing to revisit and buy low…and hold everything. But I didn’t…but at the same time, I learned my risk tolerance and I’ll just stick with what makes me comfortable. Thanks for slapping me in the face with that one Wall Street.

So at the end of the day… do your homework…ignore the noise…and be comfortable with your allocations.

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OT for sure…

I’ve been investing for three decades. I’ve embraced many ‘strategies’ and made money with more than half of my choices during my journey. The concept here, Saul et al, of a concentrated portfolio of hyper-growth SaaS companies is just the most recent in my rotation and education. It’s working well in this time.

“Bulls make money, bears make money, pigs get slaughtered.” - Jim Cramer (apocryphal)

There are many ways to invest and ‘win.’ LTBH folks do well with patience, options can juice returns for active traders. Buffet doesn’t buy SaaS (well, until recently). Soros, Druckenmiller et al, trade at the macro level. Lots of angles to make your money make you more money.

IMHO it comes down to your own temperament. You must choose for yourself, or wash your hands of the investing disciplines and pay for average expertise, hoping for above average returns.

In my life it’s on me. I make my choices, fully informed or not. As an Eagle Scout I live by the motto – ‘Be Prepared.’

As always, YMMV. Carpe Diem.

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… great post - and I’d add, remember that that’s ALL it was - a great week, nothing more.

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I might be wrong but wouldn’t all these FAANG and big dividend stocks sink along with everything else during a crash or Bear?
So considering them as a “diversification” wouldn’t be very accurate.