Why I don't care about the next AAPL

Apple just hit 2 trillion and some people are proud of themselves for owning it or have FOMO for not owning it. I’m glad I haven’t owned it, and I’ll explain why.

In the last 5 years:

AAPL is up more than 350%
TSLA is up more than 650%
MSFT is up more than 300%

…and I don’t regret not owning any of them.

SHOP is up about 500% in 2 years.

…and I don’t regret selling 2 years ago.

ZM is up 300% this year. So is FSLY.

My entire portfolio is up about 900% in 5 years. I have actually been better off not owning these other amazing growth stories.

Don’t ever worry about the stocks you don’t own. Finding a $5b company that goes to $50b will make you just as much money as a $100b company that goes to $1 trillion. You can’t own them all.

Bear

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Don’t ever worry about the stocks you don’t own.

Isn’t half of the purpose of this board to find stocks you don’t own? (The other half keeping a close eye on the ones you do.)

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Don’t ever worry about the stocks you don’t own.

The key word is “worry”

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Don’t ever worry about the stocks you don’t own.

The key word is “worry”

If you worry about stocks you DO own, sell them! You’ll sleep better! LOL

Denny Schlesinger
promises to behave, sorry.

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While my performance has not been as good as Bear’s or Saul’s or a lot of folks who hang out here, it has surpassed my wildest expectations.

If I remember correctly I first started following this board in 2016. After reading Saul’s story I decided to stop dabbling in the stock market and make investing a serious endeavor. I set a stretch goal of gaining 20% a year. To be honest, I had negative returns in my first year, but I was not discouraged. The reason I lost money was because I sold a number of positions I had been holding just to avoid taking the loss. My thoughts were “it’s only a paper loss until you sell.” There’s an element of truth to that, but it ignores the opportunity loss of not being invested in companies that are growing and have stock prices that reflect that growth. Other than that first year, my gains have been extraordinary. That’s not an exaggeration, as compared to the indices, most mutual funds and what I assume to be the gains of the average investor, “extraordinary” is totally appropriate.

And I have not even once bought at the “bottom”.

So I would add to Bear’s excellent advice of not worrying about the companies you never bought, don’t worry about missing the bottom. Whatever happened to the stock before you bought it is irrelevant. The thing that makes a difference is what happens after you buy it.

For the same reason I don’t pay any attention to “baggers” and I don’t have any multiple baggers in my portfolio. If you have a stock in your portfolio that’s a 10-bagger the most likely reason for that is that you failed to purchase a rising stock after your initial purchase. If you have a stock that is rapidly rising, you should be buying more of it, not just sitting on it so that you can brag about how many bags you’ve got in a particular issue.

What if you’re like me, retired with no revenue stream with which to invest? It doesn’t make any difference. The point of investing is to ruthlessly allocate your assets. No matter how great you performance has been, it is inescapable that half of your investments are in the bottom 50% of your holdings with respect to performance.

While I’m not suggesting that you become a day trader (a near guarantee for losing money), I am saying pay attention. Disruptions happen. An unforeseen event may cause you to exit a position quickly. Reallocate the cash. And listen to or read those quarterly conference calls. Management will always try and paint a good picture, but most of the time they will not lie (we’ve seen some exceptions). Take Alteryx for example. After 20Q1 report in May, I sold all but 2.5% of my position (it had been around 15% or more of my portfolio). After the most recent report, I sold the rest. The proceeds have been reinvested.

Reserve as much cash as you think you might need to weather an economic storm (I learned this lesson earlier this year - I had been 100% invested before Covid). But keep the rest invested. Cash is a wasting asset. It loses value to inflation. It also loses much more in the form of lost opportunity.

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I replied to Saul’s Q/A thread by mistake.

It should belong here.

Unless a person has billions $ to invest, for small investors like us with sub-million to a few million dollars to invest, it’s a good idea to invest in small cap fast growing companies to achieve maximum ROI. There’s the law of diminishing return in investing. The bigger the company the harder for it to grow rapidly. A good example is Berkshire Hathaway. They are having trouble finding fast growing but sufficiently large company to invest in. BRK future expected return will converge to the mean, getting close to index return of 10% per year. BRK is not going to get 20% per year return in the next few decades.

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