Canaccord Genuity raises their target to 160 and would use dips to build out positions. They say SHOP is one of those names that growth investors just have to hold their nose on valuation and own at least a starter position.
Rob
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those names that growth investors just have to hold their nose on valuation and own at least a starter position.
Because ‘Price doesn’t matter!’ worked out so well for TMF and the rest of the growth investing world in 2000…
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Rule Breakers portfolio, the premiere source of TMF growth investing, since inception, has more than doubled the S&P. Cheap shot to hit growth investors by singling out their worst year. And there is no such thing as “TMF” when it comes to any one investing style. Inside Value, Income Investor, Rule Your Retirement, to name three of this motley community, have never said nor believed “Price doesn’t matter!”
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I love MF but I got destroyed trying to pick stocks from rule breakers
Ssys, zip, been so long luckily I can’t rmemeber much anymore
I love RuleBreakers so far.
Even though I was a bit of a fool and rushed in while many RB stocks were soaring . . .
I bought 12 RB recommendations on March 9th, which was close to the peak for most of the stocks I bought.
I got killed the first month or so and was down about 11-12% at one point.
Then the market came roaring back and I am now up over 3% on the RB recommendations I purchased.
Out of the 12 RB stocks I purchased, only 4 of them are down from where I purchased them and only 2 of them are down significantly.
Vinfoolery
1 Like
There seems to be a focus on monthly returns on this board. I mean that is fine, and the returns have been great. But generally speaking, absent extraordinary market conditions (that we have now and we should take advantage of and many here certainly are to their credit) watching your stocks month to month becomes a losers game long term.
What I have found from people who say they get screwed in the market or RB sucks, or they lost their money (The nurse at my doctor’s office as an example put $5,000 in the market and she quite when it fell to $3,000) is when they do not persevere. The market is a long-term wealth growing institution. It takes experience, science, and art to do what we do here on Saul’s board, and many people just starting in the market have NONE of these, and for sure they do not have the necessary EXPERIENCE.
Just stick with it! Invest every month, systematically. Be diversified (yeah, don’t do what I do 
and heck, I recently bought back a stock expanding my portfolio by 50% - so there) follow the successful posters here, follow the RB and Stock Advisor team, live your life, try to live it by the 80/20 rule if you can (live on 80, save 20) and I can guarantee you, 5-10 years, you will be sitting pretty absent a real great depression or end of the world sort of events.
It is fun to see monthly returns, and keep at it. But for those newer to the market, if you do not want to end up being a loser in the market, and be one of the winners who build wealth, persevere and look longer term. Losing money is as much the part of investing (at least on paper) as death is a requirement for life to exist. YOU WILL LOSE MONEY IN THE MARKET AT TIMES. Guarantee it. You only stay that way if you don’t persevere or if you gamble instead of invest.
Tinker
42 Likes
to each his own.
I did not have the same experience.
For example I bought Ssys at about $130 a share many years ago and it’s about $15 to this day. Zip car?
Here’s another good one how about travel zoo? Has that gone back over $100 or so where I bought it 10 years ago?
Since I started following Saul I have accounts that have more than tripled.
I’ve been investing for 14 years so I’m very comfortable with my own strategy and no I don’t trade in and out.
At least not too often
For example I’ve held shop since about $43 a share and over the last year it’s traded between 90 and 150 and I’m still long.
I understand that The Motley Fool has some great stock picks And I know that Saul himself uses their service to find ideas.
Im just not savvy enough of a stock picker to pick out which ones those were.
If I ever went back to following one of their services it would be Stock advisor.
That’s the same sentiment as my brother who is a much better stock picker than me and doing this a long time as well.
He also didn’t like rule breakers.
I’m glad it works out for some people but not me. GLTA
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The Gardners were very clear in 1999 and prior that ‘Price/valuation doesn’t matter!’ in the Rule Breaker portfolios. They thought that paying a ridiculous price for an RB now is okay, because several years later the stock would be worth even more.
Here’s what RB staff said in spring 1999 [before your arrival]:
Unlike some of the other portfolios in Folly, the Rule Breaker method does not worry much about current valuation. For those who love finding the disparities between current price and intrinsic value, let me suggest the Boring portfolio. Here in the Rule Breaker portfolio we look at valuation with some sort of vague interest…
The Motley Fool's Rule Breakers, Rule Makers published 1999
In the book, they tell investors not to pay attention to earnings statements for Rule Breakers. It makes the point that for good companies, you should buy the stocks at any price. There is no discussion of valuation ratios and company fundamentals in the book.
At year-end 1999, they had 75% of their Rule Breaker assets in 3 stocks: AOL, AMZN, and Celera Genomics, mostly in the first two:
AOL fell from $80 to $11 in 3 years.
Amazon went from over $110 to $6 in less than 2 years. They advised selling half in the $11-11.50 range in March 2001! Even though it had crashed to only 6% of the RB portfolio at this point.
They also said this: We don’t think that [Amazon] can achieve worthwhile appreciation over the next 10 years or so…Yes, we could have sold it at $100, or $75…We don’t worry much about market pricing, however."
Celera was acquired in 2011 at $8 after Rule Breaker bought it at $80 in 1999.
5th biggest holding was At Home which went out of business less than 18 months later.
By Feb 2003, they had discontinued their RB/RM portfolios due to their poor performance, but prevaricated and said tracking 9 RB stocks was too hard, so they went into the paid newsletter biz:
The time it takes to track the companies in the existing portfolio are substantial. Tom and David Gardner don’t have time to do it…
http://discussion.fool.com/i-never-knew-diy-was-such-hard-work-1…
In TMF Bogey’s own words, the RM performance was ‘Returns were terrible relative to the market… the fact that we refused to acknowledge valuation makes this one disappointing for me.’
Then they rebooted RB in 2004 after shutting it down the prior year when Tom/Dave didn’t have time to track 9 stocks.
Rule Breakers portfolio, …has more than doubled the S&P
That’s funny, their own press says it’s less than 40%:
https://www.fool.com/investing/heres-how-you-get-motley-fool…
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Wow, I didn’t know it was that bad but I’m not surprised
Never knew they threw in the towel on amzn!!!
They’re always saying they recommended it in 1999 but never mentioned that they sold it!!!
I didn’t even mention a quarter of all the bombs in RB from when I was following it
Thanks for sharing
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good post NS
I ignore MF portfolio, and don’t think MF should have them. Be satisfied with investigating stocks and making suggestions. It is up to readers to decide which they buy.
MF in the past has been very bad about holding on to stocks too long. Maybe there is something about being an “expert” and thus being afraid to say “I was wrong” .Because all successful investors should know that they are going to be wrong a lot. Cut your losers ,let your winners ride, you need to do both.
The high priced tech stocks MF is mostly interested in will do very badly in the next Bear, when optimism and hope turn to fear.
By far the best part of MF is the boards. I wish that MF would bring them up to date with better search etc.
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MF in the past has been very bad about holding on to stocks too long. Maybe there is something about being an “expert” and thus being afraid to say “I was wrong”
I thought MF posted one time about how they analyzed their past picks and found that they would have done even better if they had never sold a stock. I forget if that was in a subscription update or somewhere public, but i thought that was the case.
-mekong
1 Like
I thought MF posted one time about how they analyzed their past picks and found that they would have done even better if they had never sold a stock. I forget if that was in a subscription update or somewhere public, but i thought that was the case.
I believe David Gardner made the statement on the Rule Breakers podcast. I also found Tom Gardner’s statement on it in this interview.
https://www.fool.ca/hidden-gems-hub/live-chat/
For us, the data shows at The Motley Fool, going back to 2002, when we launched Stock Advisor, and in 2003, Hidden Gems, that if we had never sold a stock all the way through, our returns would be better overall. And the mathematical reason is, every time you sell, like, one position of Netflix seven years ago, or one position of Amazon in 2006, you lose such upside in the portfolio that it doesn’t matter how well you sell in the other positions. So, really, I would say, hold onto your winners. Please add to your winners.
-AJ
By Feb 2003, they had discontinued their RB/RM portfolios due to their poor performance, but prevaricated and said tracking 9 RB stocks was too hard, so they went into the paid newsletter biz:
The time it takes to track the companies in the existing portfolio are substantial. Tom and David Gardner don’t have time to do it…
I wrote the article announcing the closure of the portfolio. It was not Tom or David Gardner who advocated shutting them down. In fact they didn’t really want to, but we didn’t have much choice.
In 2003 the Motley Fool editorial team had shrank from 50 or so people to 6. Our business was dying, and we desperately needed to focus on articles that contained things that people wanted to read. I don’t remember the exact number of pageviews for the Rule Maker article just prior to our shutting down the services but if I recall it was in the high double digits.
We were in the process of trying to save the company, and committing writing and editing resources to maintaining these portfolios made no financial sense. There were people who treated the stocks in these portfolios as recommendation services though we did not view them as such. We didn’t think it would be responsible to leave those portfolios out there running in public view, totally unmanned.
You may extract or interpret all of this any way you wish, but context matters.
When I wrote the article announcing the closure I stressed over how to phrase it. Could have gone with “In order to serve you better…” or somesuch, but instead went with the unvarnished truth. We could not afford to maintain those portfolios anymore. And albaby1 (who is a really great guy whom I deeply admire) slaughtered me for it. But if we’d not made some really awful decisions in 2003 we might not have even made it into 2004. So we did the best we could.
Bill Mann
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Fully understand Bill. Every business goes through a time of desperation, and the great ones persevere and come through it stronger.
I still don’t like having too many companies to track as part of RB and SA, but I fully understand the business reason for it. I’d rather have the best 15 to 20 ideas and focus on them, but people want to be continually entertained. It is actually one of the things that hurts investing return as we keep wanting to learn something new, and when new stuff does not happen we start to worry about what we do own and we do stupid things.
I am glad the Fool did what they had to do and are thriving today. Been a positive part of my life, through multiple stock crashes and booms. We are still here!
Tinker
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I am glad the Fool did what they had to do and are thriving today. Been a positive part of my life, through multiple stock crashes and booms. We are still here!
Tinker
It is also an interesting business model to allow free access to Saul’s board and most certainly to the NPI ;)…and yet these boards seem to generate pretty nice returns for the average FOOL readers.
Subscriptions are some of the cheapest in the industry I would think…especially for the value that one receives and barely tapped into for the many opportunities to crowd source investments.
But I agree with Tinker…sensory overload is not a good thing and ideally there would be a more honed down RB portfolio…the FOOL has been a great source for some amazing returns but one had to be selective and unemotional and fill in some knowledge gaps.
The FOOL is running a business and likely knows what it does best…and some of your most frequent users can and should be your greatest ambassadors for new business…but you can’t be everything to everyone…lest you lose your core mission and threaten to become less relevant.
IMO, crowd sourcing is the greatest gift the FOOL brings…super important to have active members putting their sweat equity into the opportunities…as Saul has clearly done here.
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Yet it is a shame and possibly creates a market opportunity, I don’t know. Maybe it’s just me. Suffice to say I was new to the investing game which came after selling my own small business which was unrelated to finance. I felt myself a fiduciary insofar as my family were concerned; this new venture was above all serious.I read every recommended book by every successful investor (defined by longevity, the longer the better, and documented results). Only about 10% were useful and every one of Berkshire’s reports. Having established what these types were looking for and how they behaved and thought, I began to read the superb articles published by TMF by their extremely good writers; there were about 5 or 6 outstanding ones, including Bill Mann. I could not have done without it, not least because questions could be asked. My investing is still based on those precepts and insights. Without a doubt, I would have been willing to pay up for it - far, far more than any tip sheet.
TMF has its faults(valuation does not matter; omit the bad stuff about companies; use nominal, not real market returns in selling product etc.) but its excellence is teaching the meaning of terms and ratios in those days was both unique and valuable. For that, I am immensely grateful. Naturally I acknowledge the necessity to run a business! But I was certainly one who was prepared to help monetize TMF with my subscription then and since. But at that time, that subscription-to-learn was dirt cheap. It is astonishing that more novices did not create strong demand.
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strelna!
This is very cool of you to say. I remember some of our great conversations from that time frame very fondly and learned a great deal from you and your great questions as well.
Bill
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