Valuing the market

tecmo yesterday had an ingenious idea: He posted a poll there, asking how
much the board members are up or down with their Saul portfolio. A poll that clarifies how many Saul followers came early or late to the party.

The preliminary results I saw were highly interesting. I don’t remember the “up” votes exactly but they were roughly this:

+200%: 6
+100%: 9
+20%: 15

The number of the down ones:

-20%: 11
> 20%: 58

Resulting in over 2/3 being down, with the vast majority down a lot, versus a small minority up a lot.

Thanks for capturing the limited data - the poll was removed by the moderators (really not sure why). In any event the data is pretty much what I suspected - a lot of new investors got pulled in to a momentum strategy and got caught when it turned. A pretty common pattern.



on Nov 23 dividends20 wrote (about Upstart)

These squibbles are meaningless. 10 years from now Upstart will be 10x the market cap.

Their underlying business is doing well. In next 1 or 2 quarters the euphoria will return and prices will swing to the other side.

This was implying a share price of > $2000 per share (it was trading at around $200 at the time)…

Then yesterday (May 7th) dividends20 writes

UPST - I am accumulating, Mr. Market is jittery over delinquencies. PE forward is 35. 5x potential in 5 years from here.

Stock is at $83.89 so this forecasts a price of $400+ in the next 5 years.



If the investment strategy is truly a momentum strategy, then exciting buy side enthusiasm is an excellent way to get rich. Until it isn’t.

Even that might be a bit harsh.
Pure simple price momentum is very painful when it has its inevitable bad stretches when leadership changes.
But it still adds quite a bit of value on average over time.

Sounds like Saul’s approach is more business momentum than price momentum.
FWIW, as a pure quant criterion, sales growth works better than price momentum.

Using both works better than either.
Sample KISS test: 20 years 2002-2021 inclusive.
Of stocks covered by Value Line, find the 150 with the highest 5-year sales growth rate.
Of those, buy equal dollar amounts of the 20 stocks trading closest to their 52-week highs (at market close 1 trading day before your trading).
Hold two months.
After trading costs, this strategy would have beat the S&P by 5.7%/year with about 76% of the risk using a downside deviation metric.
Basically, fewer rolling years with low returns.



Here is one of many of the posts on the Saul’s board that Saul and board monitors will delete. But you can read them until they are. If this below isn’t downright tragic to you? Well you aren’t breathing because this is terrible. The guy with 60% down still owns a porfolio of 30 times sales no earnings companies.

Here, cut and paste of the below paragraph:

The tragedy is, all this money that I have saved all these years and invested was meant for my young children’s education of which I have lost almost 60% of the initial capital. That is depressing to say the least. Maybe I should sit tight and just ride this out (which also means potentially risking my remaining 40% capital)or maybe I should just sell everything, accept the losses, preserve whatever is left of my capital and go back to investing in plain vanilla ETFs like VOO/ QQQ. Not sure. Any advice from any of you (either on or off board) would be greatly appreciated.

Good weekend and Good luck to everyone (which we all need a lot at this juncture).


Regardless any of us can proclaim returns of any sort we want. I still would wager that he is the only poster on that board with an outcome in the black.


That is a wager I am willing to take. Email me privately to discuss.



aussi nice macho post. Cool.

What’s your big claim? Let us know all about it because I’m sure hero won’t even come close.

First things first, how much are you willing to wager, then we can discuss details.



COIN - I am watching and waiting for capitulation. High risk. Trying to understand the crypto economy. PE forward is 25. Might buy.

I watched some youtube videos and read up on relevant stuff about the crypto economy.
This video (Q&A with Coinbase CEO Brian Armstong) is the most relevant.

If you don’t want to listen here is my understanding:

Web 3.0 is coming and this will enable and have embedded items like NFT which inherently are tied to crypto currencies.
How will this evolve ? Will it take off or die ? It is, altavista or Amazon / Google ?

No one knows. In my opinion it likely will be big and pervasive and the next gen apps, social media, metaverse and content creation will have frictionless crypto.
It will however take several years to get there. COIN is well positioned in this space.

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Wow. I had quite a cordial exchange with said2 today and thought I’d give this board a peek. Even my buddy PhoolishPhilip invited me over (though he hasn’t responded yet with any of his real-time decision posts or where he has all his money invested heading into tomorrow’s open). I’d followed along here for over a decade before leaving after it devolved into the anti-Saul board. That doesn’t appear to have changed. Does anyone even talk about Berkshire here anymore?


First it was, “Regardless any of us can proclaim returns of any sort we want. I still would wager that he is the only poster on that board with an outcome in the black.”

Then it was, “aussi nice macho post. Cool.”

Truth be told, Chompin, you’re the one who started the macho train. You’re absolutely right anyone can proclaim any returns they want. Anyone can also make online boasts about how much they would wager on something. I only wish there was a way to truly take you up on that because I’d gladly take as much of your money as you’d be willing to risk. I’d even propose a side bet that as of today I’m up more than you since my first recap at Saul’s to start 2019, and that includes this god-awful 2022.

I’m glad Craig electronically called you out. You deserved it. I’m also not surprised you electronically begged off. Smart move though because I assure you in real life you’d be paying out to quite a lot of people.

My thanks again to said2 for the exchange today, but I’m probably better off going back to lurking.