Thoughts on my current positions

Investment Analysis Clubs Saul’s Investing Discussions
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My number of positions has shrunk, which means the percent of my total in each has grown, and which means, in turn, that I’d like to buy some new positions. Being retired, and not having any source of significant income besides my investments, when I want to buy something new I have to take a look at what I have and decide what position I might like to reduce or sell out of.

When I recently did that, I realized that when I look at my current positions, I can’t find any significant position I’m unhappy with and want to reduce or replace. That’s a good place to be (and pretty rare for me) – happy with all my positions. So this is probably a good time to discuss my portfolio.

First there are my big four positions, unchanged from the last few times: Ubiquiti, Synaptics, Bofi and Celgene. These four positions and high conviction, keep doing what they are supposed to do, and just seem to keep melting upwards. Let’s look at them.

UBNT – I first bought it a year ago at $31.75, and in 6 months it was up 76% to $56. I added small amounts all the way up to $51+. Then it hit that inventory issue when they built inventory to reduce delivery time, and the stock fell all the way back down. I bought a little on the way down and a lot at $31.50. It closed at $44.30 Friday so it’s up 40.6% from that recent purchase and up 39.5% from my initial purchase a year ago.

SYNA – I first bought a year and 4 months ago at $42, and kept buying as it fell off to $35. It went pretty much straight up from there to about $93 a month and a half ago (up 121% from my initial buys and up 166% from my lowest buy). I added on the way up too, especially between $57 and $65. It’s now at about $80, up 90.5% from my initial buy.

BOFI – I started buying this almost two years ago at $28. It went almost straight up for the next year and 4 months to a high of $106, and then sold off to $70 on short attacks. It’s now at $77.70, up 177% from my first buys. I bought a bunch more on the pullback, between $84 and $70.

CELG – I bought first a year and a half ago at $53.50. It’s now up 72% at another new high of $92. I most recently added at $69 on a dip from the previous high.

On all these four I’ve kept adding when I was moved to do so, on the way up, and on dips.

Then we have Zillow and Sketchers.

I most recently went back into Z about six months ago at $77 to $83. It hit $160 three weeks ago, and is now at $149, up 93.5% from my lowest buy. I bought all the way up, but less as the price advanced. Highest buy was recently at $141.

I tried interesting people on this board in SKX when I got into it 12 weeks ago at $47, and then down to $45. (“Why would you buy UA when you can buy SKX so much cheaper? And growing faster!”). It’s now at $58.75, up 30.5% in 12 weeks from my low buys. Channel checks indicate that their sales are up over 40% year over year this summer and that’s about as good as it gets in retail. My most recent big buy was at $54 when this news was made public.

Now I’ll hit the rest of the significant positions in order of position size:

SZYM – You know the story. No profits yet but they are doing everything right.

PFIE - I first bought at $3.30 but my average price is probably about $4.20. Up 38% in the past three weeks after an irrational sell-off.

JCOM – I’ve been in this about 5 months. A bit slower than the others but I like it.

AIOCF – I started buying at $18.75 less than three months ago. It got as high as $23.70 and as low as $16.65! Now at $18.10. Rapid growth in security camera systems.

SWKS – Think IOT and connectivity. I like it a lot. Bought 2 weeks ago at $52. Now at $55.

WAB – An old favorite of mine. Bought a year and 8 months ago at $44. Now up 91% at $84. The only stock on any US exchange up for each of the past 13 years. Only 121 posts on the entire MF SA board for this stock years after it was recommended. How wonderful!

AMBA – supplies chips to GoPro and security cameras. I bought a year and a half ago at $13. It’s now at almost $32! That’s up 146%.

AEYE – Been discussed a lot. We’ll see how it plays out

ULTI – Lots of renewable income but high PE. I bought two weeks ago at about $133. Now at about $146.

PRLB – A new small position about 3-4 weeks old. Down since I bought it.

Hope you’ve found it interesting.

Saul

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Hi Saul,

What is your YTD return?

Thanks for everything.

Tony

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Hi Tony. Right now I’m at 98.3, which means I’m down 1.7%. The NASDAQ is up 1.4%, the S&P 500 is down 0.2% and the Russell 2000 is up 0.5% (pretty tightly grouped). I had losses on CALL, Pandora, AFOP, GTLS and CSGP, and probably some others, but got out and reinvested the money.

Saul

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and probably some others

Yes, HZNP, GALE, KRED and LOCK. I don’t usually look back, just forward, so I didn’t have these on the tip of my tongue. Most of the losers never became big positions, or even full positions.

Saul

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Saul,

Nasdaq is up about 2.5%. S&P and Dow both are up around 8% although Russell 2000 is down a bit. I’m not sure where exactly are you getting your numbers from?

If I understand your thinking correctly, you don’t really care about the indexes as you have beaten them over the years. Even if you were to compare, I’m not sure which index would be a fair comparison, since you don’t box yourself into a specific cap. Maybe Russell 2000 is closest?

Thanks for being candid about investing in general.

Tony

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Saul,
I see you dropped Afop. What was your thoughts on why you sold?

Andy

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I bought SKX, if my community is any indication back to school is going to be very good for them.

I Have UBNT, SYNA, YELP, MIDD, ELLI (which has really moved) and CELG as my largest holdings.

I love the usefulness of YELP and I think it will grow for a long time. I think Retail is under a lot of pressure from online, but restaurants are holding up if they can execute quickly. I think over the next decade we will have much less real estate devoted to retail stores and more to restaurants.

Elli just makes os much sense to me. And there is a similar company in Pleasanton CA that is not yet public but doing software for clinical trials compliance. Think of them as similar to ADP or Paychex. (or Peoplesoft and Workday) Take something that has very complex regulatory compliance, have experts in that area then then sell compliance services to many many companies. This makes so much sense to leave those complex tasks to real experts.

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Saul,

Same question as Andy re: CTSO? Thanks much. -Chris

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Same question as Andy re: CTSO? Thanks much. -Chris

Chris, I listed what I called “significant” positions. CTSO was not a significant position.

Saul

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I see you dropped Afop. What was your thoughts on why you sold?

Andy, These are quotes from the release and CC.

Although our second quarter revenues fell short of our previous guidance, due to lower than expected demand from one key customer… we are encouraged by increased sales to our telecom customers and European customers…Regarding forward guidance, we expect revenues in the third quarter to be flat with the second quarter. Despite flat revenues in these three quarters, we continue being encouraged by the prospect of emerging business growth in the coming years…

We experienced a slowdown in orders from our largest customer in the last month of the second quarter. This resulted in a shortfall of revenue from the guidance given in the previous conference call. Our understanding is that this slowing was temporary and we have seen a return to a more regular order pattern from the customer recently.

This was all too iffy and dependent on one big customer for me and I had more securely growing alternatives.

Saul

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This was all too iffy and dependent on one big customer for me and I had more securely growing alternatives.

I don’t mean any disrespect, Saul.

Judging from the traffic on this board and all the recs you get on posts, don’t you think you have a moral obligation to keep your followers up to date, maybe even tell them in advance before selling yourself? Lots of these folks are young and new to investing. They might be following you and duplicating your trades in a hope for 32% yearly return.

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Judging from the traffic on this board and all the recs you get on posts, don’t you think you have a moral obligation to keep your followers up to date, maybe even tell them in advance before selling yourself? Lots of these folks are young and new to investing. They might be following you and duplicating your trades in a hope for 32% yearly return.

Hmm. Not Saul, but I have to respond to this. How much do the people on this board pay for Saul’s advice? Zilch, right? How much of Saul’s past recommendations (buy and sell moves) are fully documented? Some, but certainly not all. So if anyone is blindly following Saul’s moves they are up to no good and are most likely going to get burnt!!! In fact, new to investing folks should not be trying to emulate Saul’s moves, at least that’s what I think. These new to investing folks should in fact be trying to learn about investing by following a paid service like Stock Advisor or Inside Value, learn the ropes, and then try to understand what Saul does and why it works.

This is a very good board. There’s a lot of value here but blind following is not something that works here or anywhere else. I would go so far to say that this board is better for intermediate to highly experienced investors.

Thanks,

Anirban

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…maybe even tell them in advance before selling yourself?

Whatever Saul chooses to post, I sincerely hope he does not even consider providing news of any action before it happens. That would often require delaying his own action, just as it might compromise the value of that action by causing a run in one form or another. (Some of this picks are quite lightly traded, and Saul has said he even has to spread out some of his moves to keep from distorting the market.)

Saul’s main obligation is to himself and his family. His trades should be made without consideration of anyone else; followers of this board should come in a distant second. When he shares his actions after the fact that is much appreciated, but his choice.

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Think about what I said, was it so unreasonable? I never said it was his legal obligation, just moral.

I have been paying a close attention to this board for a while. Saul is clearly an intelligent and experienced investor with great heart and desire to teach everyone not just intermediate or highly experienced. I think he might agree with me on this.

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Think about what I said, was it so unreasonable? I never said it was his legal obligation, just moral.

Saul is an experienced investor with a great track record, but he is in no way an investment advisor for anyone who reads posts on this board. He is kind enough to share some of his experiences on this board. Saul is not responsible for anyone’s decisions except his own, and everyone here should understand that they are making their own decisions. People can take his information or leave it but to try to make Saul feel responsible for anyone else’s decisions (or any negative outcomes) is not appropriate.

Chris

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I pay close attention to Saul’s opinion, but make, and am responsible for, my investment decisions. I appreciate Saul sharing his knowledge (wisdom) but, in my mind, he has no obligations to any of us; he is accountable to himself and to anyone for whom he manages that person’s money, nothing more than that. Thank you, Saul

Andy

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From Miaom:

"I don’t mean any disrespect, Saul.

Judging from the traffic on this board and all the recs you get on posts, don’t you think you have a moral obligation to keep your followers up to date, maybe even tell them in advance before selling yourself? …"

You’re joking, right?

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Thanks Saul.

Andy

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Lots of these folks are young and new to investing. They might be following you and duplicating your trades in a hope for 32% yearly return

I am new to investing with only a few years of buying individual stocks under my belt and am fully aware that if I throw myself into the fire, I might get burned.

I am grateful to Saul and everyone else on this board for greatly accelerating my learning curve.

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Lots of these folks are young and new to investing. They might be following you and duplicating your trades in a hope for 32% yearly return

I am not new to investing, but I am new to Saul’s way of thinking. So far, I have learned a tremendous amount by reading what he shares with this board.

I think he is fairly clear in most posts about what he is doing. I have listened to his thoughts on his top four holdings, and I have bought three of them. I am still learning about CELG, so I have not made any purchases there yet.

I believe that if Saul lost faith in one of his top four positions he would make some type of an announcement. I know that many others on this board post their analysis of the quarterly reports as well.

I do read what he has to say about the smaller positions he takes, but I do not have the funds to invest in everything he mentions. I do know that he moves in and out of these smaller positions fairly quickly as well. Other than that, I just consider the conversations as informative. I learn a lot about the companies, and some of them interest me enough to follow more closely (SZYM).

I would never blame Saul if I took a position in some small company like AEYE and it went down. That wouldn’t be reasonable after all of the warnings that Saul has made.

Maybe the difference between people new to investing and those with some experience scars is that I also don’t believe that I have to be in a stock for the entirety of its journey. If I get some CELG now, it can still do really well. If I miss the ride from .64 to 1.00 on AEYE and wait till the conversations on this board are more focused on the real numbers of the company, that is all right with me. In fact, one thing I have learned from Saul is that nothing is permanent and the numbers reveal more of the truth about a company.

I hope Saul continues to discuss all of the moves he makes. It is incredibly beneficial for someone like me who has some experience but no real prior avenue to learn effective analysis from someone actively following a small group of stocks with a particular investing lens.

It is really great that it is an active board also. I imagine Saul enjoys the alternative opinions expressed about the companies he discusses as much as I do. I know I learn a lot by listening to all of the information posted about the companies.

I want to learn more; that is why I read this board. I believe that by learning more, my returns will go up. I don’t think there is an easy path to 32% returns.

Thanks Saul,
Tdonb

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