I know this is way off-topic, but what the heck is going on here? This is becoming really bizarre. It’s day after day, but today really stands out. The Russell is down 0.4%, the S&P is down 0.5%, the Nasdaq is down 0.2%, the Dow is down 1.05%, the IJS is down 0.5%, and my portfolio is up another large 1.9%. This is starting to be bizarre and I don’t know whether to just sit back and enjoy it or start to seriously worry about it. It doesn’t make sense. If I was up 1.9% and the market was up 0.8% or something, I’d feel better about it. What’s going on? Are we just invested in all the best stocks in the market? Hard to believe.
In an April 29 article, “Can You Find Your Fortune With Fewer Stocks?” that is behind the paywall for Everlasting Portfolio, Morgan Housel notes a study in which four Australian economists analyzed the returns of 4,700 mutual funds and found that the average fund’s 10 largest holdings - representative of their best ideas - did beat the market.
It would seem to make sense, then, that as information becomes more accessible, as the Foolish community works more effectively together, as the collective intelligence gathers experience and improves, that yeah, we, as a whole, should be able pick the best stocks - and more people should be coming to the same conclusion we are about which companies/stocks are best as well.
That said, to be safe, I personally appreciate the caution here as ego and overconfidence could definitely lead to epic blunders. Winners get lazy, losers get busy is something you often here in sports.
BroadwayDan, who is up on 20 out of 23 today in a down market.
However I’m not super concerned. Yesterday I was DOWN 1-2% even with the market up a sizable amount. When we are invested in a higher concentrated portfolio with low diversity (the common stocks talked about are nearly all smaller-fast growing tech companies), we can expect higher volatility as well as day to day results that don’t track the market seemingly at all.
Saul,
I understand the emotion of trying to decide if it’s time to worry or sit back and enjoy the ride. In my 40 plus years investing I have never experienced anything like the last month or so. The broader market struggling but my holdings just pounding it. This is thanks to you and all the awesome contributors to to this board.
As I’m typing this I’m holding my six day old granddaughter as she naps, think for today I’ll enjoy the ride.
I always hear on CNBC that the top 5 stocks in the Nasdaq are driving this market. Because of their size I see the thinking but as we know some of the stocks we are in have done even better than the FAANGs. It is my belief that there are so many life changing innovations now whether they are in immunotherapies, autonomous driving, AI, data analytics, SAAS, storage and more that are changing the world. These powerful drivers transcend what would be normal market returns for those that can tap into them.
Looking at my own pf, I see all the financials are red, while all the holdings of the kind we discuss here are green.
Perhaps the market is assessing the awful prospects and knock-on effects of a trade war with China, while assuming that domestic companies will continue to invest in Saas because they have to.
I think what is going on is there are several new technologies hitting the market at this time. These technologies are aimed at taking out large S&P500 companies market share, and replacing them with technologies that are better and faster.
Since we are not invested in S&P companies, when the S&P goes down it doesn’t matter.
But we are invested in those companies eating some S&P’s lunch, so they are going up … FAST.
I’m not sure this is going to slow down for a while, because there are more and more smart people coming up with innovative solutions to big data problems.
Not sure how many years it’s been watching this board but I think 3 or 4 or maybe more…
Saul, the tweaks you have been making are the reason I believe.
I remember when you wouldn’t buy anything that didn’t have a p/e!
I think your on fire right now even more so than the past
Tech stocks/ high growth rates
It’s like you are the fisherman in “a river runs through it” where after learning and practicing for so long, one day he just breaks off into this rhythm that no one ever told him about, beyond anything he thought possible, he just found it through doing for so long…
That being said, I will expect to get thrashed along the way with a correction or two but I’m am so psyched for everyone here right now
This is super awesome!!!
I think what is going on is there are several new technologies hitting the market at this time. These technologies are aimed at taking out large S&P500 companies market share, and replacing them with technologies that are better and faster. Since we are not invested in S&P companies, when the S&P goes down it doesn’t matter. But we are invested in those companies eating some S&P’s lunch, so they are going up … FAST.
I’m not sure this is going to slow down for a while, because there are more and more smart people coming up with innovative solutions to big data problems.
I like your analysis winlock. I sure hope it’s true.
Saul
This board has just picked the best stocks… back pat, back pat…
Okay, i am not really disagreeing with the best stocks comments, but come on. The answer is a little easier than that.
In my opinion, there is a huge bull market in both software SAAS companies and cloud companies. All of these types of companies that are growing very strongly have been on fire for quite a while now. This bull market has not been happening in many other tech companies. It just so happens that the companies this board follows fall in these categories.
Is this an accident, I would say no. I have said for a long time now that Saul has an ability to sense what is working on the market and he was early to this bull market. Go back and look at Saul’s stocks from two years ago. Quite a different type of stock. I could go into detail but I think anybody who has been here awhile knows this is true.
So, let me be clear. I am not in any way saying something bad about this board or Saul. I think there is a lot to be said that SAAS and the cloud were not being valued properly a while back. Not sure that is not true now, but there is certainly a possibility that these type of companies need to be valued differently as Saul has been saying for quite a while and I have bought into a few.
In any event. It seems very clear to me what is happening. There is a small subset of the market represented on this board. As long as that stays in favor. This board will outperform. I hope it does for quite a while.
One possibility: Industrials sit in the eye of the eye of the storm during any global trade war.
Industrials are central to the Dow, less so the S&P, much less so the Nasdaq, and nowhere here.
Tom
PS Beyond the potential trade wars, maybe the next thematic threat, which could be more relevant here (in bad or good ways), would be regulatory pressures building around the world’s largest technology companies.
OK, this is OT on an OT thread, but just how are you getting other fonts and symbols into your posts?
Please don’t tell anyone how to do this, this one post was hard enough to read, that’s all we need, everyone picking their favorite font-of-the-day to post in.
Let’s keep the board about investing and not graphic design aesthetics.
In my opinion, there is a huge bull market in both software SAAS companies and cloud companies. All of these types of companies that are growing very strongly have been on fire for quite a while now. This bull market has not been happening in many other tech companies. It just so happens that the companies this board follows fall in these categories.
It’s not just cloud and SAAS. It is high tech in general and they are driving the new world order. My portfolio is concentrated in AMZN, FB, NFLX, and NVDA and I have been up consistently, 1.8% today. Nasdaq is close to all time highs so it makes sense that those invested in high tech be at all time highs.
Money is coming out of Industrials, Boeing, CAT, car makers, those with exposure to China, and all this money has to go somewhere and tech is the safest home in the neighborhood. But I wouldn’t sit too comfortably. For now, it is a rotation out of industrials into tech. But if a trade war starts, as it appears that is has, then even tech won’t be immune. Just today, there was news that EU may impose a 3% tax on large high tech companies revenues (not on profits, but on sales)
GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model.
Latest forecast: 1.9 percent — March 14, 2018
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 1.9 percent on March 14, down from 2.5 percent on March 9. https://www.frbatlanta.org/cqer/research/gdpnow.aspx
Down from 5.4% last month. Appears there may have been some irrational exuberance way back in February but that is one steep decline. I know I some politicians talking about maybe 4% or even higher at one time. The quarter to quarter track record seems pretty good there.
The Rule Breaker Portfolio, Buy AMZN, September 08, 1997
Moving forward Foolishly into another small-cap, high growth stock…
Motley Fool Staff
(the_motley_fool)
Sep 8, 1997 at 12:00AM
Shame most newbies would have no way of knowing about that or finding that. All of Bill Mann’s great Fool on the Hill articles gone. As amazing as that buy was it was even more amazing that they held most or all of it as everything was being crushed in 2001 including Amazon despite fits and starts and gasps Nasdaq up 16% in a week April 2001. Bill Mann wrote an article saying be very cautious thinking the Federal Reserve was going to save you.