After that huge sell-off in growth stocks I said I thought we had hit a bottom eight weeks ago, and by luck I was exactly correct. We have been up eight weeks in a row since then. Eight weeks! My portfolio was up 21.5% from the bottom to last Friday. To put that in perspective, that’s what the market is expected to do in two years. And others on this board were up more than me. I know, for instance, that Gaucho Chris was up 5-6% more than me from the bottom.
Two people on the board thought that SYNA and UBNT fell precipitously yesterday. Rizzz called it “quite a rout” in those two stocks! Let’s get a grip, folks! SYNA bottomed at $56 two months ago. It closed last week at $92.70. That was up 65.5% in two months! Then in the last two days it came slightly off the high, and finished yesterday at $89.20 ! Big deal! You call that a rout??? And UBNT. I bought some two months ago at $30.95. It closed Friday at a high of $46.40. Up almost exactly 50%(!) in the two months since the bottom. In the past two days it pulled back to $42.40. A rout??? (And it’s a high beta stock as I’m sure you know).
That’s what happens when you don’t have graphs of your stock prices. You lose perspective. You see everything in terms of where it was yesterday instead of the big picture.
JMO
(And by coincidence, I added small amounts to my positions in each of them yesterday (at $86.95 and $42.36)).
Saul
For FAQ’s and Knowledgebase please go to Post #2319
Hi Saul,
When I looked at the top line and bottom line for SYNA for the past several Qs, I saw sequential declines. Should I be concerned? Even though from the prospect of YOY growth, they are fine. Thanks!
Zangwei, They indicated that since their acquisition of the fingerprint sensing company in October they spent a lot of money in R&D on integrating it with their systems. They are now flooded with orders for the combined system and increased their revenue projections from +20% to +40% for the coming year. You might also note that your total revenue for 2014 of 632.7 is only for three quarters (and it’s almost equal to four quarters of 2013).
Also they are also buying another company that is sole provider of some chip to AAPL and they will be able to use this company’s chips to integrate their whole system earlier in the process.
Synaptics raised its revenue outlook for the fourth quarter. They now expect to report record revenue in the range of $300.0 million to $310.0 million, up from its previous guidance of $275.0 million to $295.0 million and representing an increase of 30% to 35% over the prior year period.
Further, revenue for fiscal 2014 is expected to be $933.0 million to $943.0 million, an increase of 41% to 42% compared to the prior year.
After that huge sell-off in growth stocks I said I thought we had hit a bottom eight weeks ago, and by luck I was exactly correct. We have been up eight weeks in a row since then. Eight weeks! My portfolio was up 21.5% from the bottom to last Friday. To put that in perspective, that’s what the market is expected to do in two years.
Saul:
Thanks for sharing your positions and trades.
Rather than look at your portfolio performance from your “bottom” designation…unless you sold at this time or bought for the first time at your “bottom”…not sure they mean what you say regarding returns for 2 years. Because otherwise, you have not secured your gains in the first case or negated prior losses in the latter.
Your YTD returns would be lower from Jan 1 through today…is that correct?
Hi Duma, I’ve always been very clear and transparent about what I meant. There had been a huge sell-off in growth stocks (affecting almost all the MF RB type stocks whether they had any reason to go down or not, while large cap stocks were mostly unchanged). This sell-off lasted about seven or eight weeks in March and April. You must have been aware of that, no matter what you were invested in. Many people on the MF boards were very concerned about it.
Somewhere in early May, based on my observations, I posted that I thought my stocks had bottomed the week before and would be going up from there. You said that it wasn’t a bottom because various obscure indexes argued against it, and they said the market was surely headed down. We argued on the board about it.
I was clearly right and you were clearly wrong. I wrote on Monday We have been up eight weeks in a row since then. Eight weeks! My portfolio was up 21.5% from that bottom to last Friday. To put the magnitude of the rise in perspective, I pointed out that that’s what the market is expected to average in two years.
That means absolutely nothing about my “returns for 2 years”. I can’t imagine where you could have gotten that from. I was talking just about the rise in my portfolio over those eight weeks! That was absolutely clear from what I wrote. If you look back at my posts I must have written at least three or four times in various posts that I was at -13% for the year at that bottom that we are talking about, so of course my year to date returns are less than 21%. I also clearly posted that I was up 5.7% for the year after the rise. (105.7 divided by 87 equals 1.215, which confirms a 21.5% rise).
As far as “securing my gains” (whatever that means", I never do that as I am always nearly 100% invested. What I do is grow my portfolio’s value and sell a little from time to time to live on.
None of this means that there won’t be market corrections sometime in the future, it just means that there wasn’t going to be one eight weeks ago when the stocks bottomed. There are always market corrections, and if you keep calling for a correction indefinitely, sooner or later you will be right and you can say “I told you so!” Even a stopped clock is right twice a day. I find it more profitable to stay nearly fully invested and not try to time the market.
I think you should go back and re-read what I said in our “discussion”.
IMO, you cannot take your timeframe and close off the discussion for convenience.
Is your “bottom” the bottom??? Dunno…but it has only been a few weeks and the same data I presented applies today as it did then.
Does your bottom hold for the next 1 year, 2 years, 5 years…are you saying that it the floor???
If not, then your metric on your gains from this “bottom” is merely smoke and mirrors UNLESS, you committed NEW money at the time of the bottom and you sold at the top. Otherwise, your previous positions would have taken a hit when the market turned south and you would not ordinarily include those as a gain.
But as to being right or wrong, funny you take that position because I didn’t take that with you. I was merely suggesting that holding more cash would seem prudent to take advantage of buying opportunities.
Sorry you were offended but if I could offer one piece of advice unsolicited though it may be, I have seen many an investment guru feel quite bold/brave in bull markets…only then to see them crumble under the weight of their overconfidence.
The market teaches humility, at some point or another, to everyone.
Thanks, Saul! I am late to SYNA and am nibbling the shares on the way down! Hopefully, the coming year revenue will be as the management forcasted, I just got bitten by the LL’s bad earning report and poor future guidance. BTW, what do think of LL? Thanks!
It’s time for you to take a deep breath, my friend. You obviously have some kind of chip on your shoulder or a huge ego easily bruised.
And please keep your comments positive and on point if you want to be taken seriously on this board.
Saul writes with extreme clarity and precision as he did in post 2423. If you take his writing simply as the clear factual stating of what he predicted to happen and how the market in fact responded, you will understand his clear and simple meaning. No more or no less.
We are all in this together. It’s time for the sniping to stop.
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FrickNFool
(there’s a Fool FAQ somewhere to explain this, but this was quicker for me than hunting that down)
That’s what happens when you don’t have graphs of your stock prices. You lose perspective. You see everything in terms of where it was yesterday instead of the big picture.
Saul,
Thanks for that post. Now about 8 weeks ago, you had decided to sell some shares in some of your stocks that hadn’t declined much to buy shares in companies that you thought were declining for no reason.
Now we have a situation where some stocks have fallen 10-20% in the past week. Examples include UBNT, PSIX, AFOP, SZYM, and others. Other stocks like JCOM and SYNA have not declined as much. Have you or are you doing any reallocation this week?
Now we have a situation where some stocks have fallen 10-20% in the past week. Examples include UBNT, PSIX, AFOP, SZYM, and others. Other stocks like JCOM and SYNA have not declined as much. Have you or are you doing any reallocation this week?
Hi Chris
I did buy a little UBNT at 42.36, and SYNA early in the week at 86.95. Those are very high conviction stocks. I also bought some AIOCF at 22.09 and 22.43 some PFIE at 4.30 (which was probably premature), some HZNP at 14.76 and some others. I sold mostly CSGP to raise the cash (very high PE and poor performance over a period of time while Z has been going up). I also have started a position back in YHOO.
By the way, no way I’d sell any SYNA or JCOM as I really like both of them.
I just sold UBNT Aug14 $40 puts for $3.10. So I received $3.10 per share in my account. If the stock stays above $40 then I just keep the $3.10 and the options expire worthless. If the stock goes below $40 then I will get assigned (forced to purchase) UBNT for $40. But considering that I already collected $3.10 per share, my effective purchase price will be $36.10. The shares are trading just under $41 now.
Chris, I also use options, and I also have written puts on UBNT. But I think you omitted some of the risks:
Your maximum profit is capped at $3.10 per share. If the stock returns to its 52-week high of $56.85, you will have left significant capital gains on the table versus simply buying shares outright.
Because you may be assigned shares, you have to take the potential allocation into account. Remember that you’re still exposed to the full downside risk of the stock in the event of catastrophe. That means you may be forced to hold a smaller position now just in case you end up with those shares.
If the stock dips significantly, you may not feel able to take advantage because there’s a chance you’re going to end up with more shares from those puts. If it then rebounds, you’ve left more money on the table since you didn’t take advantage of the opportunity to add at a great price and also probably have a smaller share position to account for the potential of more shares from those puts.
I can say that I’ve been a victim of all of the above. Like everything else, you make mistakes, you learn, you gain experience, and you adapt. I can’t imagine giving up options as a tool, but nonetheless: there’s a learning curve, and I don’t think the risk/reward is as cut-and-dry as your post makes it out to be. Just my opinion, of course.