Saul's portfolio at the end of September 2023

Saul’s Portfolio at the end of September, 2023.


Here’s a table of the monthly year-to-date progress of my portfolio for 2023. I’ll present them as starting from 100% of my starting value and figure from there:

End of Dec 100.0% starting point

End of Jan 109.7%

End of Feb 107.0%

End of Mar 105.8%

End of Apr  91.9%

End of May 106.3%

End of Jun 119.0%

End of Jul 127.5%

End of Aug 124.5%

End of Sep 116.5%

I have to say that, while I’m certainly happy to be up 16.5%, my results year-to-date are near the bottom of the results for our posters on the board. Many are up 25% to 35% ytd, but I didn’t go for companies like Celcius and Transmedics. So please don’t follow me.

I used to compare my results to an average of the Dow, S&P, Nasdaq, Russell 2000, and the IJS. That was, in order, Mega Caps, Large Caps, Tech stocks, small-cap and mid-cap stocks, and small cap Value Stocks.

While the Dow is up just 1.1% year-to-date, and I beat the S&P’s 12.1%, I’m behind the NASDAQ’s 25.1%, while the Russell 2000 (small and mid caps) is up just 2.0%, and the IJS (Small Cap Value Stocks) is down 2.3% this year.

So even with the Nasdaq’s 25% beating me, the five indexes average up just 7.6% ytd compared to my up 16.5% so I’m not actually doing very poorly :grinning:.

My broken arm was improving and getting close to back to normal, when four weeks ago I tripped again and fell again on the same elbow, with a lot of pain and swelling and loss of range of movement again. This has interfered greatly with my concentration, and probably my getting older is interfering with it as well. Therefore, again, I would recommend following some of the excellent other posters on the board instead of me.


Here’s what my postions looked like a month ago (end of Aug).

Aehr Testing    20.4%

Samsara         18.5%

Monday          16.2%

The Trade Desk  14.6%

Global-e        13.4%

Axon            10.2%

Remitly          2.6%

Nvidia           2.5%

And here’s what they looked like at the end of Sept:

Aehr Testing      19.5%

Samsara           18.6%

Monday            15.6%

The Trade Desk    15.2%

Global-e          14.3%

Axon              11.9%

Remitly            3.1%

As you can see, my top seven positions are still there, and in the same order, and Nvidia is gone. There were no large pieces of news during the month, but Aehr did announce an order from a major large new client and will report next week. Samsara weathered a short attack.


Some of my friends sell and go into cash when the price goes up , thinking they can guess the top. I tend to buy more, as I see the price rise as a verification. Both methods have their advantages, but I feel that selling when the price goes up works in a weak market, but in a market taking off it doesn’t work well at all.

Consider 2020 when my portfolio rose by 233% in one year, to 333% of what I started with. If I had taken profits and gone into cash after the first 20% rise, trying to catch a top, I would have missed the last 213%. And what happened in 2021? well I was up another 93% before the market started down in November. What that means is that I was at about 640% of what I started with, a year and eleven months before.

Even if I hadn’t gone into cash in 2020 until I was up 30% or 40%, trying to guess tops and going into cash would have meant a huge opportunity loss of hundreds of percentage points. And then when the market had dropped 20% or 25% in late 2021, I would have probably finally “put my cash to work”, gotten in, and tried to catch a bottom, and then ridden it all the way down in 2022. Guessing tops and bottoms is not for me.

Besides which , from a practical point of view, it’s hard for me to sell in and out to try to catch tops and bottoms, hard both psychologically and financially.

I’m pretty sure though that I won’t let any position size get over 25%, as a position size that large generally means that I have turned off my critical faculties, and it usually ends badly.

I hope that these discussions were helpful.

I have kept a permanent safety fund out of the market that I could live off for several years if necessary, and I feel everyone who does not have a secure regular source of income should do the same. I have gradually added to it over the last year or so, moving some funds gradually from my investing pool to my out-of-the-market pool. Given our advanced ages, my wife and I probably have enough to live for the rest of our lives with our out-of-the-market pool, with a little left over for our children, even if our investments went to zero (which is an unlikely scenario).


I thought I’d say a little about my #1 and #2 positions, Aehr and Samsara, as these certainly aren’t household names.


Aehr is a tiny company. Its current market cap is just under $1.5 million. What it does currently is provide equipment to test silicon carbide chips (for which chips demand is exploding). It sells the equipment not to end users like car companies, but to the chip manufacturers themselves. It also sells them consumables which are used in the testing. The way I think about it is that at this time Aehr has what I consider a functional monopoly as the chip manufacturers almost have to be able to assure the end user that an Aehr machine has tested their silicon carbide chips before the end user will accept them. Aehr is net income positive.

Here is Sjo’s excellent take from the William Blair conference in June, shortened and paraphrased in places by me. There have been lots of excellent posts about Aehr on the board

Biggest takeaways

AEHR’s wafer level test and burn in system allows them to test the device before it’s put into the car. It has a consumable part (recurring revenue). This market will be growing 30-40% at least until the end of the decade.

Every one of the silicon carbide suppliers in the world is in some form of engagement with AEHR because of their unique solution. AEHR says they think they’ll see a significant market share and perhaps a dominant market share. [This is sandbagging.]

• Adding everyone’s growth up, there’s still not enough supply of silicon carbide to meet demand.

Silicon Carbide - Biggest opportunity they’ve seen. Its growth should peak in about 2026. This is a new market.

• A normal testing system in their space costs about $18 million for one or two wafers at a time. Aehr’s system holds 18 wafers in the same footprint and costs just $2.5 million vs. $18 million. Customers say that without wafer level burn-in, you could never use the silicon carbide wafers. So AEHR is enabling this technology. AEHR has a bunch of new patents that give them a moat and a true IP differentiation.

For now, they have a head start and they’re working with the automotive manufacturers to get the AEHR system built directly into their assembly lines. Not aware of anyone trying to knock it off currently, perhaps in the future China will.

Silicon Photonics – Has the potential to be bigger than silicon carbide. Every device must be burned in and it takes 3X longer and a higher temperature to burn in. AEHR’s tester is 3X as expensive as their silicon carbide tester. Nobody else can do a 2,000 watt wafer and nobody can do a full wafer in any form of silicon photonics burn in except AEHR, so they have a huge differentiator. Silicon photonics allows you to send signals up to as much as 1,000X faster than you can send an electrical signal.

If this moves to transceiver business and optical IO (OIO), the TAM can explode. It’s probably a couple/few years out, but something is pulling this in. Something else is brewing. AEHR is spending a lot of time designing a higher voltage testing system to differentiate themselves even more.

Trend is towards silicon carbide and gallium nitrite.

AEHR’s market cap is just $1.5B, at present (9/1/2023)

Updraft that AEHR has clearly caught is testing silicon carbide and gallium nitrite.

Drivers: shift to clean energy is driving it, as AEHR burns in (tests) every one of their wafers before the guts/circuits are applied to the silicon carbide wafer.
5G infrastructure is driving silicon photonics.

Companies are trying to put multiple chips into one device package, and AEHR does their testing before the chip is installed in the device.

Silicon carbide is a new type of semiconductor in Tesla’s inverter that’s embedded in their car.

In an electric vehicle, you get 10-15% more battery use/capacity, and it charges more quickly with silicon carbide. That’s it, that’s the big driver.

Every semiconductor has a failure rate and over time, the likelihood that it will fail goes down. If a semiconductor has not failed after 1 year, it’s not going to fail. AEHR basically ages the wafer so it’s as if it’s aged about a year, so their chip failure rate is at an acceptable rate to manufacturers and their customers.

Test could take you up to 24 hours, it’s very capital intensive. That’s good for AEHR because they sell the equipment (the “razor” which is 2/3 of the overall revenue) and the individual die (the razor blade, which is 1/3 of the revenue). They test the chip in the die form, and every one of their customers they’re talking to is interested in doing it this way.

Customers must be confident that AEHR can supply them with the consumables and the equipment. They do not supply it to anyone else. 2/3 of revenue comes from testers and aligners and 1/3 of the revenue comes from the consumable. Over time, if companies don’t need to purchase more testers and aligners (equipment), they’ll still have to purchase the consumables that comprise 1/3 of the revenue.

Galium nitrate. There will be fewer small players and they’ll be acquired. They’ll need burn in and they’ll see business this year from it. Silicon nitrate will be at the high end.

Silicon photonics will be a really huge deal. AEHR is seeing this recover since the pandemic. Something is going on related to optical IO, which has a tendency to be a game changer. I should be sure to look into this.

Optical IO, it’s coming. If you start stitching this together because the communications bandwidth is becoming limited and Optical IO can increase this by 1,000 X. This could be a really big opportunity for AEHR that could become a driver for them. This will be very disruptive and you’ll hear a lot about this over the next year. They expect revenue recognition this year from it.

As you lay out the 4 types of chips, please discuss market sizes and opportunities for

Silicon Carbide -Biggest opportunity they’ve seen. Its growth should peak in about 2026. This is a new market.

Gallium Nitrite (GAN) has the opportunity to be bigger than silicon carbide. This probably won’t be burned in. If a chip goes to Apple, it will need to be burned in, and it will get burned in.

Silicon Photonics – Has the potential to be bigger than silicon carbide. Every device must be burned in and it takes 3X longer to burn in, and a much higher temperature. AEHR’s tester for this is 3X as expensive as its silicon carbide tester. Nobody else can do a 2,000 watt wafer and nobody else can do a full wafer in any form of silicon photonics burn in except AEHR, and they have a huge differentiator.

If this switches to transceiver business to optical IO , the TAM can explode. It’s probably a couple/few years out, but something is pulling this in. AEHR is spending a lot of time designing a higher voltage testing system to even more differentiate themselves.


Samsara is 10X larger with a market cap about $16M. What they do is provide companies with software, and sometimes hardware, that will help them manage their moveable, and sometimes not moveable, assets to save lots more money than the service costs them. They are putting it all together into a platform.

Their revenue this quarter grew by 43% and ARR grew by 40%. Their gross margin was a record at 75%. Adding their FCF for the past two quarters gives you positive $3M. That was improved from a LOSS of $89M in the same quarters a year ago! That’s a $92 million swing. They added a record number of $100k customers this quarter, and their total number of $100k customers was up 53% yoy.

Now if any of this interests you I’d recommend the many good posts on the board as well as muji’s extraordinary deep dive that he sent out to his subscribers

I have learned long ago that sticking with great companies wins out in the end, and beats market timing, but living through the 2021/2022 decline was very difficult.


Let me remind you first, that I have NO IDEA what our stocks will do next month. I’m terrible on predictions. But I know that the businesses of our companies will do just fine for the most part.

When I take a regular position in a stock, it’s always with the idea of holding it indefinitely, or as long as circumstances seem appropriate, and never with a price goal or with the idea of trying to make a few points and selling. I do, of course, eventually exit. Sometimes it’s after months, and sometimes after years, but I’m talking about what my intention is when I buy.

I do sometimes take a tiny position in a company to put it on my radar and get me to learn more about it. I’m not trying to trade it and make money on it, I’m just trying to decide if I want to keep it long term. If I later do decide that it’s not what I want, I sell it without hesitation, and I really don’t care whether I gain a dollar or lose one. I just sell out to put the money somewhere better. If I decide to keep it, I add to my position and build it into a regular position.

You should never try to just follow what I’m doing without making up your own mind about a stock . First of all, you may have a completely different financial picture than I have. Different age, different income, different assets, different debts, different expenses, different financial and family responsibilities, etc.

Besides, in these monthly summaries I’m giving you a static picture of where I am currently, but I may change my mind about a position during the month. In fact, I not infrequently do, and I make changes in the position. I usually don’t announce these changes until the end of the month, and if I’m busy or have some personal emergency I might not announce them even then. And besides, I sometimes make mistakes, even big ones! Don’t just follow me blindly! I’m an old guy and won’t be around forever. The key is to learn how to do this for yourself.


Since I began in 1989, my entire portfolio has grown enormously. If you are new to the board and want to find out how I did it, and how you can try to do it yourself, I’d suggest you read the Knowledgebase , which is a compilation of my “words of wisdom”, and definitely worth reading (a couple of times) if you haven’t yet. It’s on the panel to your right.

I hope this has been helpful.



First, I want to send thoughts and prayers for your physical well being and continued recovery. As you say, it affects your mental state. Second, I want to thank you for creating this awesome board and sharing your wisdom with us. Third, your humility is impressive, given your performance.
This board has inspired me to look at my investing in a new light. I once held many hundreds of positions, primarily MF recommendations. My thinking was that I was paying them for their recommendations and who was I to try to guess which ones were better than the others. I was beating the market by a few points a year. Like many of us, 2021 was stellar and 2022 was a nightmare for my portfolio. I had decided as I closed in on retirement (self-employed and still not quite there) that I wanted to concentrate my portfolio in two directions - one, dividend payers to provide a solid base, and then growth companies to ensure financial security in many years of retirement. The latter being necessary to combat inflation since I hope to be around for decades.
I am still in the process of consolidation. I have reduced the number of positions by 70% and still have a ways to go. Your board has provided an excellent source of ideas for that growth side of my portfolio. I am not accustomed to entering and exiting positions as quickly as many of my brethren here, but I get it. Most important, it’s the depth of research here that sets a high bar for me to provide the basis for these decisions. I am still reaping where I haven’t sown, but hope to contribute more meaningfully in the future as I enter retirement.

Thanks again and get well soon!



I’m pretty confident that I read somewhere that the training of AI models demand enormous compute resources. That translates to both length of time required and energy consumption. This the primary driver for photonics. Optical capabilities represent a very significant increase of communication speed as well as a reduction in power requirements.

Additionally, social media and entertainment applications (gaming) have a voracious appetite for bandwidth. This adds to the push for photonics.

If I’m wrong about that, I’m sure someone with greater technical knowledge will correct me.


Been awhile but I check in from time to time. AEHR’s been my largest holding for sometime and your latest post made it into my forum. It shares my enthusiasm. Two things (1) as to AEHR’s competitive advantage we of course can only go with the info we have but one element of their advantage that I appreciated as well as the others mentioned is that AEHR intentionally prices it’s product to keep out competition. AEHR’s CEO indicated that they price low enough so that any would be competitor would first need to invest R&D to engineer a product that AEHR originally began 20 years ago with DARPA funding. Then they have to create their own value chain to obtain the components and tools necessary to build the machine that AEHR indicates was years in the making and not just something you can snap a finger and create. Then, if you do all that you have to navigate AEHR’s patents. If after all that cost you still have to try to make a profit with all this investment and do so while competing with the price AEHR has that is calculated to discourage any new entrants to begin with.

As for silicon photonics. I agree AI and the enormous energy demands is the unmet need that photonics can solve. I was actually digging into that issue today and AEHR can go weeks without any news and found projections (that I’ll try to post later but apparently this new Fool format is not letting me go to other web pages to copy now that have the silicon photonics market at around $1.5 billion or so presently growing to around $7 billion by 2030. So it’s about the size of the SiC market now but so far has not created the same demand at this size as SiC has. Although in July AEHR announced a sale to a very large semiconductor company for photonics. May have been Intel (don’t know). So like Aerh’s CEO he doesn’t know when or if photonics takes off but he is quite confident if it does it is a bigger opportunity towards the end of the decade. But hoping sooner but with no info to peg that on.

Silicon keeps advancing but the physical limit for silicon switches is reaching a peak that physics won’t allow any faster or more energy efficient. Beyond this photonics is an anticipated solution. We shall see. In Europe alone there are more than 60 start ups for photonics. It is getting venture capital. But I cannot say to date seeing anything that would indicate it taking off yet.

Anyways, that is what I have to add. Earnings coming up this week I think so as always a stressful day with AEHR.


Hello Tinker, nice to see you rejoin the conversation on this board. We may disagree on some things that are off topic in any case, but I’ve always held your investing commentary as intelligent and usually insightful.

Just a point of clarification regarding the budding 60 European photonics ventures. Who knows how many will actually become productive manufacturers, but those that make it to market are potential Aehr customers rather than competitors. I’m sure you recognise this, but the distinction might be lost on some folks.


I made a couple of typos, I wrote

Should, of course, been “billion”


Should also have been $16 Billion.

Sorry about that.