Saul's Board

Investment Analysis Clubs Macro Economic Trends and Risks
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Hey Fellow Fools,

I’m pretty sure that there are some folks that post here that also post (or at least follow) the Saul board.

I was a holdout to jump on the Saul board as I lived through the 2002 tech debacle and really wanted to stay away from high risk tech stocks. However, after being on the sidelines for many years, I discussed with my wife to check out some of the stocks that the folks on the Saul board follow and do some research to see if we could jump on the Saul bandwagon with a very small number of shekels. I admit to envisioning a 50% in a short amount of time.

That was in mid-October.

We all know what has happened to the Saul stocks since mid-October. Most have been slammed.

We invested in one of Saul’s picks - UPST - Upstart, an AI lending platform that has had a great track record, had solid expansion plans in place and was executing against them. They claimed (and many agree) that their AI platform takes a lot of the “bias” out of the approval process which allows folks that are underserved in the credit market to get approved. I liked that story. They currently service the personal loan market, but are now expanding into the auto lending market. It is a great story.

Unfortunately, a great story and macro economics don’t always jive and UPST is down 65% since we bought. The Nasdaq has been taking a beating lately. (With more to come - I’m sure).

Again, this was a small position and I’m not losing sleep over it, but it just goes to show that VALUATION (the price that you pay for a given stock) matters.

I tried posting a similar post on Saul’s board twice now, and both posts have been yanked. I want to let folks know on this board that the Saul board is heavily censored and anyone who posts anything about valuation, about losing money, etc. will most likely have their post pulled.
Packard,

Packard, Respectfully, lets go over a few things you said here. Firstly I don’t post too much anymore, as don’t really have too much to say, plus getting on and health not the best, but in this case, it does merit an answer.

First, having followed Saul for many years and seen my portfolio in the last 4 years increase 12 fold(that includes up to last night)plus having gone through(numerous times) what you are obviously feeling at present, drops of 50% and more as in Upst, why when you state, “it is a great story” did you invest in it in the first place if you are not prepared to take the rough with the smooth? Unfortunately for you as so many others, the rough hit the fan a lot sooner than you expected but I don’t believe it gives you the right to basically attack Saul and his board.

Valuation matters you say. Sure, if you are/were intelligent enough to buy say ENPH at under $2.00 only a few years ago now and get out at 280. Now down like everything else to $153.00. How’s the valuation now for you, better or still overpriced? Do you believe in this Company or not? I think you are just p*ssed(albeit you say you will lose no sleep over this) that you got in at a much higher price and didn’t do your own homework when it was so much cheaper and would actually be in profit!

As other posters have said. Saul begs you not to follow him and of course he has to monitor closely or it would get totally out of control(I very rarely have posted on Metar but you have some fantastic posters therein) but over the years have seen how carefully Wendy manages things when it appears to be out of control and great job she has done. Each week Saul posts on Monday the rules of HIS Board and has to do this, as if he allowed you to discuss as you say “valuation and losing money” his board would be hit with literally hundreds of similar posts which would end up having no “valuation” to his own Board. Seems harsh to you and you do appear slightly upset(this too shall pass)but they are his rules and if you don’t like them, well you know the answer, but to warn off others, as to his rules and methods,I believe was off base, which if you had read the knowledgebase, don’t think you would have brought this up.

Lastly, your definition of playing with fire, your gonna get burnt, plus get in early, not late! Well the later statement albeit appears obvious but is it? I brought Shopify in late 2016, that was early. I again brought in 7 times up until June last year. MDB Feb 2018 and 4 times over the years. Both down this year, so what? This year, 4 trading days into it!!! My mistakes, many! Horrible. It hurt in 17/18 when I got too cocky and then around 2019 learnt to just take the loss and move on, don’t look back or move elsewhere into a Net, Cvna, Data, etc(all down big and again so what), I believe in them until the story changes. Oh and I brought more Data twice this year on the way down. Is that playing with Fire, I don’t know the answer, but does that give you the right to condone someone else’s methods that are obviously alien to yours. Again, Respectfully, but I don’t think so.
p.s. Regardless, Wish you well and prosperous.

8 Likes
22

On the other hand, you may also want to consider Saul’s 35 year investing record.

Pete

I think the issue for many of us, is that Saul was down 68% in 2008, which means from late 2007-early 2009 he was down more than that.

Most investors, newbie or otherwise, cannot stomach losing 3/4ths of their investable assets or retirement funds. If you have to take 4-5% out every year and that happens to you, you get wiped out.

Saul can, so kudos to him, and he’s crushed it lately with SaaS. But the overwhelming majority of people at TMF certainly can not. Stories like these losses – based on overvaluation – would be helpful to those trying to learn more.

To his credit, he has mentioned how much he lost in that calendar year but doesn’t warn people that their losses going forward, can be that large, that quickly. Doubly so for super-hi-beta stocks. It’s nearly always about how ‘good companies always bounce back, etc.’

He has built a nice nest egg and can withstand a 50-70% loss. How many of his followers can say the same? How many will sell at the worst possible time? One wonders.

Long a few of those SaaS names myself,
Naj

ps FWIW: According to Bernstein Research a 60% stock/40% bond portfolio is a 50-1 shot against to suffer a 50% loss over 30 years. A 100% diversified stock portfolio has a 2.33-1 shot of losing half their assets.

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23

That said, there is no shortage of other stock-picking models which have been highly successful, only to be deflated for one reason or another.

Not to mention models which are successful when implemented by people who really understand the models and know the limits of both the model and themselves, but rather unsuccessful otherwise.

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One should also note that

“stock held by Saul” is not the same as “stock discussed on Saul’s board”

There are stocks that get heavily discussed and widely owned that Saul himself never buys … or buys and then exits well ahead of many others.

Check out

https://docs.google.com/spreadsheets/d/15WYEG7cX2mdErck42Im4…

to see the distribution of who holds what and the number holding each stock. Go back a few months to see how fast it changes.

I get that it is annoying to have a post pulled … happened to me a few times. But, in Saul’s board case, it is very transparent what the rules are.

I get that the high risk and portfolio concentration are not everyone’s cup of tea, but if it isn’t, just look elsewhere … no need to dump on it.

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25

'38Packard,

Although this thread (predictably) descended into a session on the pro/con on Saul’s culture, I would be remiss if I didn’t point you in the direction of a couple of other boards to post.

https://discussion.fool.com/abandoned-arctic-outpost-13-122677.a… Champico is a great host
https://discussion.fool.com/where-angels-fear-to-tread-113694.as… Dreamer follows some interesting ideas and also considers some options from others
https://discussion.fool.com/new-paradigm-investing-114933.aspx Or, perhaps, with the Captain?

Mostly,

I’d encourage you to post your thoughts somewhere not on Saul’s board. The valuation discussion isn’t taboo, it’s just hard to standardize with a company who’s error bars on the growth expectations are often of the same magnitude or larger than the entire growth results for most companies.

Trying to do a 10 year evaluation with 100% growth and a taper of 6%? -20%? additional growth? It’s tough sledding. There are enough levers to pull that posts on valuation have literally filled up the board, risking the loss of company specific info, metrics, exploration and summary thoughts.

As a result, building a DCF or other valuation method would be welcomed on those other boards and would like spur on some excellent thoughts. I hope to see the discussion and join in when you do.

(I missed your original posts on Sauls, apparently)

1 Like
26

There are two basic types of investors: value investors and growth investors.

There seems to be a third type growing in number out there. Those to whom neither value nor growth matter, let’s call them meme investors*. Someone might say that they are like momentum investors, but that isn’t really true, because momentum investors also look for downward momentum, this new group doesn’t.

  • A meme investor informally gets together with other meme investors and choose a particular stock (or other instrument, like NFTs, etc), seemingly randomly (not growth, not value, not anything) and then all pile in driving the price higher. Sometimes they even have their own “language” around what they do, with acronyms for “holding forever” and similar.
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