What I've Done in my Portfolio

During the last two days I have removed 4% more from stocks and into my permanent family emergency fund. I did this by selling 4% of the number of shares in each position. No favoritism. These funds will not be reinvested in the market whatever the market does.

Lest you think I’m cutting down how much I have invested, my portfolio was up 6.7% in those same two days so I actually have 2.7% more invested now than before Monday.

Why have I done this? Well, I obviously love all my companies, but my portfolio is now up well more than 200% (well more than a tripling) in less than a year. I’m an old guy, and it just seems prudent to me to put some of the assets into my family emergency fund somewhere safer, which is what I have done.

That is not in any way a recommendation for other people, it’s just a recounting of what I have done.

Best,

Saul

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Yesterday I transferred 3.4% of my portfolio to my Portuguese bank account. Today I broke the 100% barrier, 105.4% YTD. Like Saul, today the portfolio more than made up for the 3.4% withdrawal, up 3.8%.

A big Thank You! to Saul for encouraging me to concentrate on my best ideas instead of diversifying into mediocrity. BTW, one of the benefits of a big cash reserve outside the portfolio is that it gives the confidence to own a very concentrated portfolio without having to worry about volatility. It gives one time to outlast bear markets.

Denny Schlesinger

On a scale of One to Ten, Saul is a TEN!

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At this risk of falling into the pit of off-topicness…

On a scale of One to Ten, Saul is a TEN!
On a scale of one to ten, Saul is infinity. You’ve heard it alot, but even so, thank you, Saul, for sharing, for this board, and for being incredibly patient.

-FrickNFool

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Thanks Denny and FrickNFool for your kind comments. Really appreciated.
Saul

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Saul,
Your decision to take some of your gains off of the table and put them into a family emergency fund is a good reminder to all of us that no matter how good the company, investing is not without some risk. Everyone has a different tolerance for risk, and everyone’s financial picture is a bit different. When we are seeing our stocks rise more in a few weeks than a typical portfolio grows in a year, it can be all too easy to let enthusiasm for these stocks get in the way of clear-eyed thinking and planning. Thanks for the reminder.

Dorset

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I second the praise for doing this. Perhaps we get so lost in the stocks we track that we lose track of why we are doing it (i.e. retirement, emergency funds, college for kids, or whatever). I understand that portfolio management is verboten on this board, but I think your post reminds us that we shouldn’t ignore that aspect entirely.

1poor(getting old too)guy

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Being new to this board and investing, do you have a suggestion on where to look for some portfolio management advice?

Thanks,
Terry

I’m an old guy, and it just seems prudent to me to put some of the assets into my family emergency fund somewhere safer, which is what I have done.

Hi, illustrious board. This was published 1 day before yesterday’s (October 14) tech drop. Today, premarket in my portfolio seems like a crash…

Regards.

Funny, and now I see the 129 recommendations, only from the first post.

Best regards.

I’ve been very restrained with regard to posting. This board has grown over the years such that it’s impossible (for me) to read every post as I used to. Therefore, I have developed the habit of reading every post in a thread before I post, if I have nothing new to add, I don’t repeat what someone else has already said.

That being said, I’m making an exception this time.

First, I wish to cast my vote for Saul as an 11 on a 1 - 10 point scale. My association with Saul’s investing discussions has literally changed my life. My primary contribution was belief. I know a lot of people; intelligent, logical, rational people who reject the notion that you can out-perform the market. In fact, efforts to do so are so risky that you are very likely to lose everything and end up much worse off than you might have been had you only taken the reasonable, safe, slow but steady safe route of a blend of blue chip corporate stock and AAA bonds (or however they’re rated). And that would be especially true for someone of my age, after retirement with only a pension and social security income.

“You must be insane to cast your entire life’s savings into those crazy high risk growth stocks. The stock market is nothing but a fancy roulette wheel, the house always wins, the players always lose” is the kind of advice I would have received had I asked any of my friends what their thoughts might be. I’m so glad I never asked. Rather, I read Saul’s story and I believed it.

The other thing I will add is related to what Saul calls his “family emergency fund.” Up until earlier this year, I had no such fund. Every penny I had other than current living expenses was invested in the market. When the pandemic hit in force, I panicked. I was convinced, or more accurately, I convinced myself that this time it really was different. There was nothing like this in recent history and the outcome was going to be total financial collapse. I rather suddenly viewed the market as a very hostile environment for the substantial wealth I had built over the previous few years. Taxes be damned, I sold everything.

I make no excuses. It was an irrational act born of fear. I maintained that folly while watching what would have been the growth in portfolio continue to swell upwards had I done nothing. Fortunately, I regained my sanity after about 6 weeks. I re-entered the market, but this time I held back a sizeable chunk of cash - call it a family emergency fund. Or maybe call it a security blanket. In any case it was (and remains) sufficient funds to maintain a comfortable lifestyle for 18 - 24 months. This is the amount of time I deemed sufficient for the market to recover irrespective of what calamity might befall the economy.

It’s incredible that Saul is up over 200% on the year. Incredible, yet totally believable. I, even with my spring time folly am up just about 100% for the year. To say the least, my estimation of the impact the pandemic was to visit upon my portfolio could not have been more incorrect.

My advice. Believe Saul. It’s never too late to start investing. You have not “missed the boat”. There’s yet another boat waiting at the dock. Get on board. But, at the same time do your best to reserve some cash for emergencies. At first you may not be able to reserve 18 - 24 months as I have, maybe 2 - 3 months is all you can hold back. But as your portfolio grows, take a little more out for emergencies, comfort and security. Eventually, you will have coverage that should cover you for several many months. Other than that, stay invested. Ignore the roller coaster of the periodic swings. The trend is up. Believe it.

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I totally here you in this. I too went against my own rule of “don’t listen to my gut” I mean that’s the reason I joined TMF so they can tell me when to buy/sell. But I did, I fealt the pandemic was like nothing seen before and everything will fall. I sold all my 15 stocks that were all SA Recs and literally Aug 13 everything climbed and costed me another %30 in potential growth to my portfolio. I too regained and got back in a month and a half later. I have a good chunk of emergency fund from the sell but will continue to buy and watch it grow.

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First, I wish to cast my vote for Saul as an 11 on a 1 - 10 point scale. My association with Saul’s investing discussions has literally changed my life. My primary contribution was belief. I know a lot of people; intelligent, logical, rational people who reject the notion that you can out-perform the market. In fact, efforts to do so are so risky that you are very likely to lose everything and end up much worse off than you might have been had you only taken the reasonable, safe, slow but steady safe route of a blend of blue chip corporate stock and AAA bonds (or however they’re rated). And that would be especially true for someone of my age, after retirement with only a pension and social security income.

As a long retired investor with pension/SS as a primary source of income I would like to take the liberty of endorsing comments by brittlerock, and add a few personal and perhaps useful observations of my own.
I have on several posts taken note of the valuable and selfless efforts By Dr. Rosenthal to establish and maintain this board.The recent post on FSLY seemed to me to integrate everything taught in the knowledge base into a swift and effective action when required. For me it was an eyeopener.

Consider. Many here, including me have had large positions in FSLY. The technical proposition was very strong, and the future appeared bright indeed. I bought for the long haul. I had a large position, Larger than most I dare say. The price was running up pointing to shared optimism. But when the story changes, one has to change with it and not look back. And one has to move quickly.

The FSLY preannouncement implied to those whose view wasn’t clouded by the superb technical achievements of FSLY and the reported success of the compute at edge beta, that despite the technological prowess, something was amiss. And,as has been pointed out here by those more astute than I had been, the CEO didn’t want to tell us what is was.

I had sold some FSLY, trimming before the announcement and sold more afterwards. I still owned a boatload and was dithering over what to do next, inclined perhaps to sell"at the right moment" .And then Saul posted his “here is what I did” remarks.

It was like being hit with a 2x4. It said to me “what are you waiting for you idiot? Have you learned nothing.? The ‘right moment’ is now. Its always now.Can’t you see the story has changed. Do you really believe in fairy tales? Have you been paying attention to the announcements by NET? Didn’t you just go thru the same scenario with AYX? Get up off your lazy chair and DO something.”

And so I spent the rest of the afternoon divesting FSLY completely. No looking back.

And so thank you again Saul. I’d like to take you to lunch someday.

cheers

arnie

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