What a wonderful day!

I was able to sell part or all of two of my lowest conviction stocks at down 1.0%, and use the funds to add to some of my high conviction stocks at down 6.5% to 10.5%. You don’t get a chance like that every day.

As I’ve said before, if one of my stocks is down 10% and I don’t know why, I worry, but when they are all down, it’s just noise and I try to take advantage of the opportunity.

Saul

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Unfortunately it seems all my stocks (at least the ones eligible for trading) are high conviction :sob:

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I had been underweight ZS and STNE. I’ve used this opportunity to go overweight both today.

Rob

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Hi Saul,

I do the same on days like these. I sold my little stake in ESTC (2%) to buy more ZS at 62,7. Last week I also sold my little stake in Anaplan (bought in early January) at 40$ to add more to TTD at 180$. It was an easy choice since TTD was down alot on FUD while PLAN was near all time high. Also, I don’t pay capital gain taxes in my country, so it’s easier for me to make these kinds of trades.

Thank you Saul for everything you do, and helping us becoming better investors !

Best,

Yorick.

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An even better approach might be to sell your low conviction stocks on a day when they are all up, and add to high conviction positions when they’re all down. Requires patience though.

DT

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Added some TWLO and ZS as well. Don’t know what made many of our stocks tank today, but I took the opportunity to add some more.

  • Paul -

An even better approach might be to sell your low conviction stocks on a day when they are all up, and add to high conviction positions when they’re all down. Requires patience though.

DT


Sure, but that requires market timing and/or a crystal ball.
When big drops occur and on same day other stocks drop less, if the spread is big enough, it has the same effect but removes the guessing/waiting game.

ZS down 10%, ESTC down 1%. If you choose to sell ESTC down 1% (or practically flat) and take advantage of a 10% dip in ZS, you can pounce right then and there.

Otherwise you sell ESTC when it is up 3% or something, and then have to hope ZS goes down from their current price that day, at least 6-7%, in order to net that same spread. Plus if it takes 2-3 months for ZS to make that drop, you effectively took cash out of the market during that time, and probably watched ESTC climb up over your sell price.

I held onto AYX TTD TWLO MDB ZS ESTC OKTA and SMAR today, but did not add. Chose to add to BZUN instead, as their dip was unrelated and really more about a new offering. I expect they all bounce back, but BZUN has greater potential tailwinds with Trump/Trade deal, so I rolled the dice that direction with the 6% cash I had.

If I wasn’t interested in BZUN, I am not certain where I would have added, but any of those 8 would have been good. Probably Okta and SMAR is my guess.

Dreamer

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An even better approach might be to sell your low conviction stocks on a day when they are all up, and add to high conviction positions when they’re all down.

That my dear boy, is market timing and I don’t do that. I’ve seen too many people waiting, with cash in hand, to add to high conviction positions when they’re all down… and watched while they all went up 30%, 50% or 100%, instead of down. If they are high conviction, by definition you don’t expect them to go down. I don’t sit around with cash waiting for my best companies to go DOWN before I buy them.

Saul

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Thanks Saul.
This is an aspect of the buying/selling strategy that I struggle with.

I appreciate your pointing it out.

:slightly_smiling_face:
ralph

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Thanks Saul. I just snuck into the bathroom at work to buy a little more.

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I was able to sell part or all of two of my lowest conviction stocks at down 1.0%, and use the funds to add to some of my high conviction stocks at down 6.5% to 10.5%. You don’t get a chance like that every day.

As I’ve said before, if one of my stocks is down 10% and I don’t know why, I worry, but when they are all down, it’s just noise and I try to take advantage of the opportunity.

Seems to me there is an element of market timing to this approach. If you are willing to add to high conviction positions due to an unexplained drop in all your stocks like today, why not be willing to lighten up on low conviction or trial positions during unexplained market surges? “Just noise” can cause all your stocks to go up just as easily as down, can’t it? It simply depends on what kind of noise it is.

I always keep some cash on hand to take advantage of irrational market drops. But that’s just me - I guess I look at my cash as a “low conviction position.”

Best,
DT

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Thanks Saul. I just snuck into the bathroom at work to buy a little more.

That sounds like too much information! :wink:

Enjoy!
Brian

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I agree Saul, it was a wonderful day! I also took advantage of adding to my high conviction stocks. But was fortunate enough to have sold some lower convictions earlier this week so didn’t need to sell anything today. What made the day even more wonderful for me was not seeing the board flooded with doom and gloom posts. There are so many of us that owe so much gratitude to you and others here. I know this board has thoroughly changed and improved my thought and decision making processes. So thank you for the lessons learned so that I can look at a day like today as wonderful, and be able to think thru and act on what sure seems like a nice opportunity.

Best,
Kevin

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all these “high conviction” stocks were cheaper a month ago (some of them even last week) and yet today they are considered “on-sale”?

that seems odd to me

carver
long ZS, MDB, AYX, TWLO

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Seems to me there is an element of market timing to this approach. If you are willing to add to high conviction positions due to an unexplained drop in all your stocks like today, why not be willing to lighten up on low conviction or trial positions during unexplained market surges?

As I tried to explain, I’m willing to take advantage of an opportunity for an unexpected bargain. That has nothing to do with market timing. I wasn’t hoping or expecting today’s opportunity. It just happened. What made it different is that I had two lower conviction stocks that had already fallen a good deal, one of which I had largely sold out of already, and today, when my favorites were down bunches, they hardly fell at all. It was a no-brainer. If those two had fallen as much as the rest, I probably would have done nothing.

On the other hand, I don’t sell things because of an unexpected rise. I simply don’t sell things because they are going up, period, because I expect them to go up or I wouldn’t have purchased them, and because I don’t know how far they are going up.

Saul

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“I was able to sell part or all of two of my lowest conviction stocks at down 1.0%, and use the funds to add to some of my high conviction stocks at down 6.5% to 10.5%. You don’t get a chance like that every day.”

Nice. Seems like a good time to make the change if you are looking to make the move. Smart.

So curious Saul, which stocks did you sell out of today and which did you add to.

I didn’t add to anything because it feels like a bit more backing and filling needs to take place after this incredible run. But that’s me.

I did buy a first position in BZUN on the sell off though.

Chris

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Saul,

Can you share which low conviction stock did you sell, and which high conviction stock did you purchase?

-Prat.

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Prat,

He probably sold one of his smaller positions and added to TWLO and ZS, but does the specifics really matter?

You shouldn’t really just blindly follow what others do anyway — you really need to learn to make your own decisions.

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You shouldn’t really just blindly follow what others do anyway — you really need to learn to make your own decisions.

Don’t ask for fish, learn to fish. Saul is a good teacher.

Denny Schlesinger

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“He probably sold one of his smaller positions and added to TWLO and ZS, but does the specifics really matter?

You shouldn’t really just blindly follow what others do anyway — you really need to learn to make your own decisions.”

So when it fits the situation one should be specific with what they do and we should care, but then not care when it doesn’t fit? Why then post each month every trade and move made specifically after the fact but not the day of.

Honestly at times I find this board a bit cultish. You ask the guru a question and if deemed uncomfortable then the handlers come out and answer it for him, always putting the questioner at some degree in their place.

Why don’t you just let Saul answer or not answer the question of what he bought and sold? He shares it monthly, what’s the difference.

I’m pointing this out on my last day of membership. If it wasn’t my last day I wouldn’t bring it up as it’s not worth it. Honestly I think a lot of followers of this board are scared into not asking questions because of past experiences. Not just this board, others as well. Maybe that’s the way board mentality just works. Sometimes though the herd mentality can end up silencing a lot of otherwise very valuable viewpoints.

Best of luck to everyone on here going forward.

Chris

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