This post has nothing to do with analyzing a company as an investment. So it is clearly off topic for this board. And, it’s long.
Nevertheless, I think new-comers and old-timers like myself may find it of interest. If I’m wrong about that, feel free to flag it. I’ve entered 100s of posts on this board. I recollect only one of them being hidden. That’s a pretty good track record.
I’ve been a member of the Motley Fool since late 2011. In the past, I’ve subscribed to a number of their paid services. I was a regular reader and sometimes contributor to the community boards.
I first became aware of Saul when he posted a seminal analysis of Westport Fuel Systems in the summer of 2013. This company was a favorite of the MF with numerous ardent investors. Saul’s post was highly critical of the company. Saul simply presented the numbers, drawn from Westport’s quarterly reports (I assume). Saul clearly demonstrated why this was not a good investment and he urged folks to sell their positions as he had recently done.
Saul’s analysis drew a lot of criticism. Many MF members couldn’t understand why Saul would post such a negative writeup about a company with such a bright future. The answer was apparent. Saul’s position was based on financial analysis. Those opposed to Saul based thier position on hopium. I was very impressed with Saul’s incisive analysis even though I hadn’t taken a position in the company.
About six months later in early 2014, Saul created this board. I did not become immediately aware of it. My earliest post was in 2015 (if you were unaware, the MF retains a history of your posts). It’s safe to assume I was a reader of the board before I mustered the courage to make an entry. I’ve been a regular reader and contributor to this board almost since its inception.
What have I learned about investing in the stock market from this board in the last ten years? Quite a lot.
First, and foremost, I’ve found Saul’s methodology to be superior to all the alternatives of which I am aware. To be clear, the alternatives fall into two primary catagories: Technical analysis (TA) and recommendations of “experts.”
TA is, in brief, various techniques of analyzing stock charts as a means of predicting future movement in the price of the stock under study. I find this methodology to border on voodoo. It can be very complex and highly sophisticated, and may even be a profitable techinique for traders. But, as an investor, someone who buys a stock with the intention of holding it, I find TA to be meritless.
“Expert” opinion is also problematic. The problem is in identifying trusted and reliable experts. Seemingly, they are omnipresent. Several work for Wall Street institutions. Many self identify and publish their work on sites like Seeking Alpha (SA).
I’m not saying expert opinion is of no value. Saul subscribed to Bert Hochfeld’s newsletter. Virtually every investment decision I have made over the last several years started with something I read on this board. I have more confidence in the research and analysis by some of the people who post here than any SA author. But reading a post on this board is a starting point, it does not dictate an investment decision.
Saul’s methodology isn’t the only thing I’ve learned about investing. Probably the next most important thing I’ve learned is if you’re a serious investor, you have to get comfortable with losing money. Obviously, the goal is to make more than you lose, but it’s inevitable that no matter how well reasoned your decisions might be, you will make decisions that do not pan out as hoped or one of misreading a company’s direction and not selling soon enough, or selling much too soon. In the last ten years I’ve invested in Skyworks, Bank of the Internet, Alteryx, Aehr Test Systems and more companies than I can remember that eventually soured. Probably my best example of selling too soon would be Nvidia
And, then of course there are macroeconomic forces that can and do push the whole market into negative territory. I would venture that everyone on this board who was invested before and during the pandemic did not anticipate the reversal of 2022. A lot of money was lost.
Despite the losses, my tenure on this board has been intersting, informative and profitable. I hope you can say the same. I won’t wish you luck, if luck is the basis of your investment decisions you may as well buy lottery tickets. What I will suggest is that you stay invested and keep broadening your knowledge. I think that’s the key to success.