Breaking my rule to post in this thread. Normally others here have handled information about the high growth companies we are focused on here, which I very much appreciate, so I read, enjoy, and recommend. This group is a signficant part of my investment research resources, together with other fool groups, members and of course, TMF generally. This group and TMF move independently, and I appreciate the ideas from the different perspectives.
I am still invested. I will continue to be invested because I have a plan. This is a group with a good track record of following a particular investment approach and reaping the benefits. You don’t have to follow this approach and have been warned multiple times to MAKE YOUR OWN DECISIONS.
We are in an environment where the SAAS companies are not as popular as investments, so the supply/demand characteristic of equity markets results in lower value. You can have a great company, but without buyers (or supporters), it can fail, simply due to humans’ irrational behavior.
As recounted by Morgan Housel:
Lehman Brothers was in great shape on September 10th, 2008. Its Tier 1 capital ratio – a measure of a bank’s ability to endure loss – was 11.7%. That was higher than the previous quarter. Higher than Goldman Sachs. Higher than Bank of America. It was more capital than Lehman had in 2007, when the banking industry was about as strong as it had ever been.
Seventy-two hours later it was bankrupt.
Mr. Housel and Tom Gardner also suggest certain limits on any single investment and have said in many different ways, you must KNOW YOURSELF. If you can’t take the volatility of this approach, don’t invest.
I have posted this elsewhere in the TMF forums:
For my own application I have added some basic rules to TMF’s approach which I happily admit I stole from whitewater nuts and i believe also apply to investing:
Questions to ask BEFORE you invest:
1) Do I understand the risk?
2) Do I have the skills/capacity/tools to deal with that risk?
3) if I’m wrong about my skills/capacity, am I willing to accept the consequences?
If you answer ‘no’ to any of those questions, please do not invest*.
*in the case of whitewater, don’t try the move, the rapid, etc. More recently, maybe the 100 foot wave guys.
Those questions are about UNDERSTANDING YOURSELF as an investor and also about TAKING RESPONSIBILITY. If you answer no to any of those questions, find a way to learn more about this way of investing and develop your skills and capacity.
If you answer ‘no’ but then invest your money anyway for some reason, you may win, but you can lose too. It’s been said all over this forum. Please don’t distract this very extraordinary working group with the pain you caused yourself. Find the lesson in what has happened - did you overcommit, did you not understand the company or the market, do you have the aptitude and personality for equity investing? Study the Knowledgebase here and read, read, read.
If you have data or a new investment opportunity, bring it. This could be a good time to invest - you decide. Otherwise, this group has work to do.
Thanks to TMF, Saul, and the Managers,