Saul's board is a pump and dump board

[finalmatrix7]

First excuse me for posting here if it’s not the right board to post but I think it’s the most appropriate.

I want to post this to his board but he blocked new acounts from posting or only allow selected members to create new post. Maybe out of fear of others to expose his pump and dump scheme?

He boasts his 30% return per year but that’s the result of pumping speculative stocks to his followers. He’s not an true investor but a momentum trader, stock pumpers. he pumps stocks on uptrend without long term sustainable growth. He bail out if the stock is not moving up and find excuses: “oh, the company is not as good as I thought.” (LOL!) or the result is the stock get pumped huge percentage in a short term. People got fooled by his so called track record and buy at peak foolishly. Most of his picks peaked, then tanked at least 50% or even 90%. Just look at most of his past picks. Funny things, he failed so many pumps this year: TMDX, ENPH etc. People are not that stupid anymore. You should look at how he praised ENPH. Tips: avoid stocks that went sideway for years then explode 10 to 20 times in short time.

Another point to keep in mind is the short term capital gain tax is a lot higher than long term capital gain tax. So the after tax return is a lot lower for people jumping in and out of different stocks short term unless everything is in tax sheltered account.

I was an investor for more than a decade and invested in good companies. Got brain washed by his strategy in 2019, suffered 30% actual lost PLUS 50% opportunity loss vs if I was not distracted by his stupid pump and dumps and stayed with my original investments. They were up whopping 50% since 2019 vs downed 30% from his pump and dump method. That’s a total loss of 53% since 2019. (0.7/1.5 minus 1 = -0.53) It set my networth back 5 years. and wasted me 3 years for losing lots of money. VERY expensive lesson.

I found my root and back to real investing. Saul idea about concentrating in 6 to 10 speculative(unprofitable or super hyped with short term tail wind) stocks is very dangerous. Warren Buffett said first rule is: don’t lose money. There are many amazing companies in the US and the world to invest in. No need to concentrate in 6 to 10 pump and dump stocks.

My current portfolio contains several dozen stocks and they were up 231.59% for last 5 years (2018 to 2023) or 27% CAGR. No, not one time COVID thinig. This year, 2023 YTD they were up: 43.35%!

I hope board admin can keep this post or if not right place, move it to the right place. I hope I can save some people from falling into Saul’s dangerous trap and becoming a speculator vs an investor. or those already in it, get out ASAP!

I will share some examples from my current portfolio.

Top 6 stocks and some notes:

Ticker Company Name

NVO	Novo Nordisk
CDNS	Cadence Design Systems, Inc.
SNPS	Synopsys, Inc.
MANH	Manhattan Associates, Inc
MEDP	Medpace Holdings, Inc.
QLYS	Qualys, Inc

Some notes of the top 6 companies, click to enlarge:

Top 15 stocks:

MANH
CDNS
QLYS
SNPS
NVO
MEDP
AZO
FCNCA
FICO
AVGO
ORLY
WINA
PH
FN
LULU

[Tamhas]

There is a link on Saul’s board where you can request to post, but I wouldn’t bother if this is the sort of thing you would post. You completely mischaracterize Saul’s approach as well as ignoring that there are a bunch of other people there contributing their own ideas. Anything Saul buys he expects to be long term, but sometimes perceptions change and it is not.

[Tamhas]

Still there for me. First post by the author too…

[finalmatrix7]

Hi Jeff,

Few weeks ago, I shared something like this to my friends:
“Walked a wrong path, we are more clear of the right path.
After going through darkness, then we know how bright is the light.”

I saw your reply. not sure why you deleted it?
I saw this happens alot. People feel scare of rebelling against Saul method? is this sign of dictatorship in a way? When people are conditioned to : "you can’t say this, you can’t do that. " they become obedient. It’s a very subtle brain washing. When someone has to ask: can company xyz be in the portfolio? It speaks volume about people state of mind.

Text book definition of pump and dump is security fraud mostly happen to penny stocks. It’s a boiler operation where fraudster hired promotors to contact people to buy the low volume penny stocks meanwhile fraudster dumping it at huge profit. This type of fraud happen rarely.

Most of modern pump and dumps are the result of market force thanks to internet and social medias. A group or large number of people promoting speculative stocks, e.g. GME or HKD are a good extreme examples. They just happen in a more dramatic scale. Once buying force peaks and people start taking profit, there’s a high chance of 50% to 90% loss of value. From experiences of past 3 years, i can easily spot them now. If I suspect there will be dumping later, I avoid them. e.g. I avoided buying ENPH, SMCI at their peak.

Once, I was one of Saul group. I know how it feels like. It’s group think, authoritarian-like. Once they think like him, they become like him! When I was in their group, against my previous investing framework, I bought all kinds of random specualtive stocks on my own and loss money. It won’t work as lone wolf buying speculative stocks. They need everyone buying the same stocks and that’s exactly what happens: Look at their portfolios! mostly same stocks. If their stocks are best of best, there’s nothing wrong for everyone holding the same companies but they are not. Most of them have just short term spurts.(or just revenue growth with no profit to show for)

Once people got into their group, it’s very hard to get out especially if they are bag holders. I got out after struggling for 1 year back and forth even I had previous investing experiences for over 10 years. Those who stayed are likely those with years of profits from prior trades and they are upset people are leaving their group. (Less profit for the future or they can’t get out of bag holding unwilling to admit mistakes) . The reality is: if the investment is truely great, there’s no need to promote them, the market will recognize ! But speculation can go on and on, and people got fooled: their method works until it doesn’t and late buyers suffer huge loss. ! or someone still keep doing it after years of losing, hoping one day they will make it big. It’s like many penny stocks traders! or gambling. For pump and dumps, only early buyers profit.

Not all his/their picks failed, some become successful companies and they praise his genious years later as proof but failed to mention many huge crashes after they dumped them: Lightspeed(LSPD), Enphase(ENPH)(Recent fail), Alteryx, Inc. (AYX)(This one was crashed before the interest rate/inflation), DocuSign, Inc. (DOCU). Upstart Holdings, Inc. (UPST), Asana, Inc. (ASAN) etc

As for portfolio updates, why? When I selected stocks for long term buy and hold, I expect them to do well in 5 years, 10 years or even decades, not months or 2 years. But’s fun to track them on Google Finance. Try it!

Unintentionally, the way I picked stocks in early years resulted in a portfolio like Charlie munger way: e.g. Costco is one of his favorite stocks(no position). I knew the companies were good but not completely sure why. Later I learned more from Charlie about return on capital, return on equity etc. Combining that with great product, profitability, great companies do well for long term and their stocks remain expensive for long term. Great companies are not complicated to understand, e.g. Costco? (No position): it minimizes cost and passes the saving to customers. result: low profit margin but high return on equity, consistently growing earning, share holders are rewarded.

I may not spend lots of time posting here but may come here once a while. You can create a portfolio on Google Finance and track its performance progression vs indices. You will amaze at their low volatility and higher return over time. But study those companies to understand why. e.g. I look at return on asset, return on equity, revenue trend, earning per share trend, free cash flow trend, share buyback trends, out standing share count trend. Buyback is good, reducing share number year after year is good!

My current holdings:
2020:
Drawdown: -25%

2022
Drawdown: -15%
At the bottom of 2022, it’s still 34% above 2019 high before march, 2020 crash.

Nov 19, 2023:
It’s 78% above June, 2022 bottom.

5 year CAGR: 27%

YTD, 5 years performance vs indices: click to enlarge

BTW, can someone tell me what this board is for? I see it’s not a personal board? That’s why posted it here. I feels like a water cooler place for investors. I think if I post this to Saul board, it’s highly likely promptly get deleted.

[jdc115]

This is a personal board and your post really doesn’t belong here. Nor do I understand why the need to try to alert people about Saul on somebody’s else’s board.

[finalmatrix7]

OK. This will be my last post.
If there’s nobody to help others from suffering, this world will be a darker place.
Some of whom reading this may not understand it now, I hope it planted a seed and they do understand one day and become a true and great investor instead of a speculator chasing short term profits.

[Graydrake]

Hey, I only recently returned to MF, but have reviewed Saul’s Community isnsome detail. We are all here to make a buck or two, some traders, some long-term investors, some successful, some not. I have not use Saul’s strategy sufficiently long to make any comment on my personal success or failure, but …

Every strategy has successes and failures, greed and fear drive the markets, bubbles and excessive collapses are not imaginary. I think it is irrational to be critical of any strategy if you only open a short-term review window of your choosing. Saul and his followers do not shy away from publishing massive failures, Saul himself reported a 62+% loss in 2022. Conclusions on a process must encompass multiple years, perhaps decades, not 2 /3 years. Buffet loses 30% in his worst years, if you would have entered at the top the prior year, you would be screaming Buffet’s strategy is a loser.

The Motley Fool Community posts should focus on strategies members deem to be successful and the rationale around them. Long term success or failure is always the burden of the individual investor’s personal choices - including the improper use of the
data from coaches with long term records of success.

Graydrake