I am only doing the common stock. And I am trying to make a larger point here. I am up 90% on my overall position on Z. I do have a position that will grow with the company. But what I am learning for Saul is to demand it all, from the company, NOT the STOCK price. I looked at UBNT after the last earning report and I saw everything I was looking for in terms of Business Performance and at stock that got clobbered. Mr. Market had lost his mind. I took UBNT to a much larger part of my portfolio, it is now 11% of my portfolio, I am expecting a good report on the business and of course I would like to see the stock do well, but it is the growing, profitable business, trading at low valuations, that interests me most.
SYNA is my second largest at just under 10% I have bought it 5 times and am holding all five positions. I listened to Saul, DID MY OWN HOMEWORK, and knew why I was buying part of the business. And I am riding a winner.
I have stocks that I like and follow with smaller part of my capital, but I am looking for a growing, profitable business, trading at some reasonable multiple to earning,sales cash-flow … When you find that, go big. Be prudent, have a limit of capital in one business, things happen. My limit now is ~10% of my capital in. So I may well trim UBNT in the coming months if the stock moves up. Or I may decide it is the stock of my life and stay in. But I guarantee I will be thinking about it.
I also understand the reason the stock tanked, a build up in inventory; which can be a huge red flag in a company. But I thought it was reasonable to address the out of stock problem, customers where not getting the equipment they needed because there was none available. SO people were not looking in depth they saw inventory build and sold mechanically. They had probably been burned before on a company with a “story” about inventory build. Queue the story about cat burned sitting on a hot stove never sitting on a hot stove again, but they never sit on a cold one either.
My point is there is no substitute to learning about the market, the company and forming your own opinion. I try to look at the earnings call and decided for myself what I think, before I read anyone else’s opinions. The people moving the market with big institutional money are not any smarter that the readers on the boards. They have more experience and may have good leaders. But we have them too, Saul is trying to teach people his methods. Not to be a stock flogger.
My favorite boards I have found so far are on Rule Breakers, not that the stocks there are any better than say Stock Advisor. But the discussions are calmer and more in depth. The merits of the company and the business decisions are discussed a lot more than the stock price movement. When the stock moves people ask what business development might have happened… This week there was a large move in a stock that people had been wondering about, lots of people were giving up on the business because it was failing to deliver revenue growth. But this week all 4 or 5 insiders bought large cash positions in the stock. now that was something to discuss. People putting up cash, rather than being gifted stock or options, that is a great indicator they think the problems in the business are temporary and are buying in large positions.