What I decided about AYX, TWLO

I am in the process of shifting the balance of my portfolio a bit from what I posted here a couple of weeks ago. I won’t belabor the macroeconomic weirdness of the general stock markets continuing to rise as the economy slows (thing are never different this time).

The effects on the stocks followed here were:
Selling NVIDIA this morning at a slight profit

I guess a week or so ago, when there were discussions about AYX, where my position is up over 100% of selling half

Yesterday, based on weighing the discussions about TWLO, where the position is also up over 100%, I sold half

The psychological game I’m playing with myself to reduce the stress of any volatile behaviour of these shares is that I’m now playing with the house’s money

The above is not a recommendation for others (I’m as clueless as the next guy about how the future will unravel), but is just my awkward way of thanking the collective and especially Saul for both suggesting these shares in the first place and for continuing to discuss them in multidimensional depth so that I can make decisions like this (good, bad or ugly).

Paraphrasing the great Yogi Berra: ‘Selling a stock is 90 percent psychological. The other half is technical and fundamental analysis’

Thanks to you all,



This is not a comment about any particular stock rather the idea of selling just because price appreciated.

This could be the biggest mistake we ever make. It certainly was for Rick Munarriz with Netflix costing him well over $1 million by selling early.


Sometimes this is a key sign to the biggest winners ever.

Just google “winners win David Gardner” or “Let winners run high David Gardner”

Or listen to his Rule Breaker Investing podcast about summarizing Stock Advisors 200 picks. Google that or read that episodes transcript and focus on “understanding our biggest losers”

Ultimately do what helps you sleep at night and keeps you invested long term.



The psychological game I’m playing with myself to reduce the stress of any volatile behaviour of these shares is that I’m now playing with the house’s money – Jeff


It’s NEVER the house’s money. It’s yours. Pretended otherwise is a delusion that can lead to “sub-optimal results”… meaning you may make poor decisions based on that kind of viewpoint.

Rule Breaker / Market Pass Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.


And David Gardner often says his biggest losers weren’t the ones he bought and then lost 50,60,95% of the value. It’s the one he sold too soon.

Selling a stock that went on to return 1,000 or 7,000% or something like that.



Jeff, I think what most of us are trying to tell you is that selling a stock just because it has gone up can result in some huge, absolutely huge missed gains. One of the things that I’ve learned from this board is coming up with a solid sell strategy. In my opinion, although I know many will disagree with me on the valuation, that comes down to two or three different things. I posted recently about my thumbs down calls, https://boards.fool.com/my-thumbs-down-calls-34132749.aspx. This was a mix of the two ideas that I’ll discuss below.

  1. The valuation doesn’t support the price in any scenario. I think this one is relatively difficult because valuation is absolutely a dark art. During ebullient times valuations can be pretty crazy, and during pessimistic times they can be equally crazy on the other extreme. Westport, WPRT was a prime example of Saul demonstrating this and is what ultimately brought me to this board.

  2. The business case has changed. For example, if ABMD suddenly had its FDA approval withdrawn…well that will be a clear case of the business changing. Or maybe AYX suddenly had a competitor that was eating their lunch or things of that nature.

I guess there is a third option which is:

  1. Your position has grown out of whack with your risk tolerance. Maybe your AYX has grown to 25% of your portfolio and you don’t feel comfortable with a position of that size. I think most of us would say a 10-15% position is probably fine, but getting beyond that is getting uncomfortable.

I’d make the case that both AYX and TWLO are neither number 1 or 2, they have gone up over a 100% because they are kicking butt. THeir business case has actually improved and their valuation is high but defendable.

We know that AYX is going to come in at a TTM of around 203 million which puts their EV/S around 20. On the upper side of their range but not crazy high by any means. I certainly wouldn’t sell them at that valuation.

Bear has a great post,https://boards.fool.com/poll-friday-fun-twilio-next-q-341357… which showed the absurdity of TWLO’s guidance. They probably have a EV/S of around 16-17 depending on how many shares they have. I think that is on the upper end of their range but don’t bet against a company that is growing 60+% (77% last quarter).

In summary, I think the reason you are getting such a strong reaction to your post is that the reason you cited was that AYX and TWLO were up 100%. If you are always trimming your winners because they are winning…well you won’t win much. If you are trimming your winners 1, 2, or 3 above…well that is a different story.

Happy investing!



Thanks for the input. I guess I wasn’t selling because they had doubled, but rather because I am getting increasingly concerned about the market, in general and the thought process allowed me to keep half of the position and hold it indefinitely (if need be), without concern. Yes, it’s a silly game I’m playing with myself (as has been pointed out - it’s still my money, not the houses, and if I had enough confidence to hold half, what’s the point of selling the other half of the position.

Well, I have a long weekend to ponder both your advice and the dealing with my own twitchy trigger finger.

Thanks much for the input.



My greatest gains so far were during my LTBH life… NFLX over 12 years paid for a significant portion of the home I own, a home bought with cash from NFLX LTBH, and FB calls over ~18 months. I know, bad use of leverage, go to the NPI board if you must disagree or correct me.

Meanwhile… I got caught in a great ‘loss’ today ignoring this board. I did two things wrong at a minimum. First, I bought ‘hardware’ companies, recommended by the Fooolish brothers. Companies followed here for a time and dismissed. ANET and NVDA.

I bought NVDA a few years ago, so cry no tears for me on my covered calls. I’ve been in and out of ANET at least twice now, losses both times. Dumb trading.

That’s the thing, right? This isn’t a board recommending trading, but it does. The LTBH concept isn’t part of Saul’s gig, despite his protests.

I’m good with the stocks whispered here. I might buy back into ANET and NVDA yet. I bought more TWLO earlier this week, $109.xx. Short term angst, perhaps long-term gain.

My point… You spend your money, you take your chances. You might get ahead, you should learn. It’s on you.



OK, sold half of two companies running away from the market in order to play with the “house’s money.” Others have pointed out the fallacy in that thinking.

I’m more curious about what you did or plan to do with the proceeds. Just sit on cash until the perceived turmoil passes? How long do suppose that might take? Reinvested in some “safe” blue chip? If things are as volatile as you seem to think, what’s “safe”?

Don’t misinterpret my comments. I’m not criticizing you. It’s not even rational to think that investment decisions are dispassionate and unemotional. The investors with ice in their veins is passionate about maximizing gains. Others are passionate about sleeping comfortably. We all have our reasons for our investment decisions. Emotions are a driving force for virtually everyone. I’m sincerely interested in your plan for the profits.


When to sell or trim

I think often about selling stocks with really high valuations like an OKTA or AYX,
but the think about paying taxes on your gains, the chance that you’re wrong, and what will you invest in thats better? So should you just keep the IBM stocks your father bought you 30 years ago.

Thank you all for pulling me back from the edge by the scruff of my neck, Rebought the TWLO yesterday morning - so far, so good :slight_smile: