I have tried to warn people that when things are at the bottom and at their worse, somehow all these people turn up on our board shouting “Sell! Sell! Sell!” It happened this time too, and unfortunately, some of our members got scared and sold out at nearly the bottom. My midweek low was Mar 16th, just about a month ago, when I was at 84% (down 16%). As of right now I’m at 125.7% (up 25.7%), which means I’m up about 50% in a month, from when everyone was hollering sell.
The same thing can happen with individual stocks. Just one week ago (Tuesday’s close in fact), one of our stocks closed at $113.75, and all these people showed up, sanctimoniously talking about how management lacks integrity, management lies, how the writer is going to sell his shares at the next days opening, etc. I tried to warn people about this too. Right now it’s at $149.75, up $36 in one week! That’s a lot to get scared out of, more than a third rise.
The lesson is that, in both of these cases, the market in mid-March and an individual stock a week ago, it makes sense to pay more attention to people who you have confidence in from our investing community, and not someone who shows up just to scare you. It also pays to remember that the media looks for scare stories because that what sells, and repeats them and repeats them. Don’t get scared out by media stories unless you see something in the numbers too.
Best,
Saul
A link to the Knowledgebase for this board is in the Announcements panel that is on the right side of every page on this board.
For some additions to the Knowledgebase, bringing it up to date, I’d advise reading several other posts linked to on the panel, especially “How I Pick a Company to Invest In,” and “Why My Investing Criteria Have Changed,” and “Why It Really is Different.”
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Such a great investing lesson embedded in Saul’s last post. The well known Buffett adage is: “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful!”
A compliment to the Buffett quote is a personal thought I have used in the past which basically states that: “In my time as an investor I believe I have made more money from having the right investor temperament than having the right stocks or the right timing.”
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I also saw on CNBC that Jim chanos is short zm and I have heard that these hedge funds will try to plant negative stories in the press to make the stock drop.
Knowing some of it was probably due to that helped keep me in the position.
I added at 140 but wish I was as opportune as you and bear adding around 115
As always Thank you so much!
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I have tried to warn people that when things are at the bottom and at their worse, somehow all these people turn up on our board shouting “Sell! Sell! Sell!”
The same thing happened when ZScaler reported earnings. Hopefully none of the Fools sold and missed the 40+% rise since then.
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I’m someone who sold out in Feb and sitting on 90% cash. Before selling out I was about 80% in index funds and 20% in SaaS stocks. Finding this board in Dec 2017 has been a great learning experience and the SaaS stocks have juiced my returns by quite a bit as a bonus. I’m up about 3% YTD right now.
Here’s the prices when I sold out on Feb 24th.
AYX 133.175
COUP 160.2479
CRWD 58.3198
DDOG 44.8713
MDB 154.712
OKTA 125.794
TTD 284.0908
ZM 105.4081
VFIAX (S&P 500 index) was at 298.5 when I sold out, too.
ZM is the only one I thought twice about selling and it was more than twice but I still sold out. Whoops. AYX was around $81 about 9 days ago and I thought about buying back in. I didn’t. Whoops again.
I’m very bearish on the next 6-12 months because I just don’t see how any company including SaaS will avoid the carnage after consumer spending doesn’t rebound and company earnings continue to crater. I’m just a bit too close to retirement to risk a small potential gain this year vs losing 50%+ if the market decides to revalue stocks because we’re heading into a depression. Plus there’s a further risk that I and my family are all out of work right now due to this situation so if things continue to stay ugly and the economy doesn’t come back we could remain out of work and lose half our money if we stay in the market. It’s just not right for me and my family right now so if I miss out on market highs this year I’m willing to accept that until market visibility returns somewhat back to normal. We’re in the midst of a once in a 100 year worldwide event so it’s hard to predict what will happen in the next 6-12 months.
Maybe I’ll be wrong. Regardless, I do expect Saul to continue to outperform the overall market because he’s really good at picking companies. I’ll be back in at some point and hopefully making some extra money by following Saul and the other main contributors on this board.
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“The same thing happened when ZScaler reported earnings. Hopefully none of the Fools sold and missed the 40+% rise since then.”
I jumped in and added to my ZS position on a number of occasions at that time. Those positions are up an average of 46% over the past 6 months. Not great, but not bad. I have been using these positions as a hedge against some higher priced positions I own in ZS and have been playing “chicken” while I hope I get to a bit above breakeven on the portfolio position. Then, at that point, I will exist.
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I believe that rule number one should be to invest in stocks that bounce back, in stocks one trusts to bounce back. This give you the courage to hold instead of selling in a panic. Today the market confirmed that rule for Saul stocks,
DOCU, OKTA, VEEV, and NFLX made new all time highs today!
Denny Schlesinger
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I watch Saul out of the corner of my eye and never make a move until I passively check to see what he did or does.
It is the little guy and the vanity/luxury businesses that are getting hurt.
Today’s restaurant owner will be tomorrow’s food cart owner. Like in 2008, cattle will be culled from the middle class herd.
The big guys, who run the market, have fine bottom lines.
All my friends asked me during the sector rotation last year “what should we do”?
My reply: “what did Saul do?”
Once a day I face “mecca” and thank my lucky stars for Saul.
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DOCU, OKTA, VEEV, and NFLX made new all time highs today!
SHOP is also near it’s all time high, I still had about a 3.5% position in it, sold half of that and redeployed into CRWD, DDOG, and ROKU.
Also continue to hold my NFLX shares, the only “legacy” stock I kept from my portfolio BS (before Saul 
). I believe NFLX is going to report a stellar quarter with subscriber additions and user engagement well above expectations, and the stock will continue to rise.
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Those positions are up an average of 46% over the past 6 months. Not great, but not bad.
Can I ask what your expectations are in regards to returns over 6 months?
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carver1963
“Can I ask what your expectations are in regards to returns over 6 months?”>/i>
Great question. In hindsight, I did appear to flippantly cast away a +40% return over the past 6 months; calling it “not great, but not bad”. Your question made me give this some thought and do a bit of analysis on my portfolio. Using October 01, 2019 as my anchor date, since that was the ZScaler investment I was referring to in my original post, I went back and looked at each position in my portfolio to see how each position has done since the anchor date. Here are some thoughts.
Total Positions in Portfolio: 73
Average Position Gain Since 10/01/19: 15.54%
Top 15 Gainers Since 10/01/19
INSG 156.5%
LVGO 141.8%
ZM 99.9%
SPCE 86.9%
DOCU 65.1%
FIVN 63.7%
NVDA 61.4%
SE 59.1%
SHOP 58.7%
**ZS 48.8%**
NET 41.9%
OKTA 37.4%
FRPT 34.5%
AMZN 33.0%
ZNGA 28.9%
Bottom 5 Losers Since 10/01/19
LK -76.6%
JMIA -55.5%
PINS -35.6%
ESTC -29.4%
BFAM -24.0%
So, Zscaler at 48.8% return over the past 6.5 months is not bad. Now GREAT would be INSG, LVGO and ZM!
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It is relative. Last year just owning an S&P 500 index fund got you about 31.5% for the year with dividends included. 46% on a stock for 2019 would be pretty nice but not incredible. 46% on a stock for 2018 or 2020 so far is absolutely amazing.
This has been a good thread with overall optimistic takeaways but I enjoyed reading your post and its genuine vibe. It is a good reminder that the human element is always a factor.
I am earlier in my investing career but I’ll never forget witnessing my father take a bath on his portfolio amidst the financial crisis and still deciding to cash out at what (in hindsight) was near the bottom to pay for what he could to send my sister to college. Sure, if he had kept the money in the markets he would be whole by now (and likely much more) but he did what he thought was best for our family at the time. I admire the heck out of him for it and he is a better man because of it.
Not everything can or should be measured in dollars and cents. We all hope to buy great companies low, hold, and sell high but our priorities and life’s timing doesn’t always work out that way.
Best of luck.
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“So, Zscaler at 48.8% return over the past 6.5 months is not bad. Now GREAT would be INSG, LVGO and ZM!”
I keep kicking myself for closing out my ZS position in the $40s but then I remind myself that i used the proceeds to buy more LVGO @ $24 and start a new position in OKTA at $99.
Trying to teach myself not to look back but somehow the losses always seem to hurt more than the joys of big gains.
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I keep kicking myself for closing out my ZS position in the $40s but then I remind myself that i used the proceeds to buy more LVGO @ $24 and start a new position in OKTA at $99.
Trying to teach myself not to look back but somehow the losses always seem to hurt more than the joys of big gains.
If you look at your portfolio as a whole, and not just at the losses or gains for each stock individually, that ought to help increase the joy.
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I keep kicking myself for closing out my ZS position in the $40s but then I remind myself that i used the proceeds to buy more LVGO @ $24 and start a new position in OKTA at $99.
Trying to teach myself not to look back but somehow the losses always seem to hurt more than the joys of big gains.
Sorry if this is OT because I’m discussing a concept more than a company, but I will tie it in to ZS. You put one point quite well: it doesn’t matter how the stock you sold does; it matters how the stock you bought with the proceeds does.
But there’s another point here. If we (I sold ZS too) were correct in our evaluation to sell, ZS now appears quite dearly valued. I wouldn’t buy today, so I’m not sorry I sold. I can’t extract every dollar that comes from the market mis-pricing something. If I were able, I could have Alteryz at $150 and bought it all back at $80. We know that’s absurd. Thinking we can wring the last bits of gains out of a stock we evaluate to be a sell is no different.
So don’t be sorry you sold unless you think you made the wrong call about a company’s prospects. If that’s the case, consider buying back even though the price is higher. That’s not the case with ZS for me – nothing has changed (except maybe hopes that they’ll re-accelerate due to WFH).
Bear
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To echo Bear, here’s a quote from the Knowledgebase:
Here’s a great quote from Huddaman: “I don’t really need to be right for the stocks I sell, I just need to right about the stocks I own.” Boy! Doesn’t that really say it all! It simply doesn’t matter what happens to a stock after you sell it. You can’t hold all the stocks in the market. Some stocks you don’t hold are going to go up. A lot! So what!!! The only thing that matters is what the stocks you are holding do!
It’s the kind of thought you might post on your refrigerator door to remind yourself every day.
Saul
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What are the positions Saul has? I’ve been trying to find these just to educate myself on some of the saas picks.