The Slau Board?

Greetings, Hounds:
The market is becoming interesting again. Pardon my obsession with Saul and his board, but I really like and appreciate the work that they do there. I don’t know of a five year stretch when there were so many companies growing sales at such rates as these SaaS and other picks. This makes “this time different.” But different how else? Valuation models? Maybe, maybe not.

Watching the action in these volatile days, the companies being punished most are the companies farthest from GAAP profits. Is NET worth $70 and 40 times sales? Or something more typical; 4x sales for a very fast grower…in other words NET should be selling for $7, give or take. That’s a big gap and a lot of downside risk. Others like DDOG which actually have GAAP earnings (presently) look somewhat more compelling for the simple reason that they have proven that they can make money…but still, 36x sales and a forward PE (naturally optimistic) of 238. Sure sure, those are old-timey valuation measures, but…

It’s unfortunate that Saul doesn’t allow such info to cross the eyeballs on the board, and I understand and admire him and his crew for the tight ship, but how many of his readers will be wiped out? Saul himself is not immune. The market can be irrational longer than any individual can stay solvent.

Interesting times. Interesting to consider the confluence of high growth and value, colored by whatever valuation methods the market is going to tacitly agree to in the next few years.



but how many of his readers will be wiped out? Saul himself is not immune.

A lot will be, or are being, wiped out as we speak. The price anchoring that is going on over there is mind blowing. The worst part is that more than a few investors there seem to be using margin to buy on the way down because these price drops are perceived as irrational. They can only be judged as irrational because Saul has banished valuation from the discussion. Saul’s own use of margin, and arrogance, will be his downfall. There will be blood. A lot of blood.



and if you think for one minute Saul really cares about his adherents, I’d suggest you’re wearing rose-coloured glasses. I find the arrogance quite distasteful and hypocritical. People bash TMF non-stop (it seems to me), but at least they are accountable and have solid trading guidelines in place to prevent abuse.

they don’t like me over there and constantly remove my posts, so I’m probably in good company.

sorry - rant off.

I’m looking at adding to PRAA - again. I am a long time holder, have taken advantage of weakness in the share price on several occasions and currently see it as close to compelling again. I think they report again shortly and will be reviewing to see if I will add more shares.


by my post title, I meant to suggest that this be an adjunct to Saul’s discussions. One rooted in long-standing realities.


Right on, Randy. And this is a good place to call attention to those quality issues that now have attractive numbers. And earnings!!