No. of Recommendations: 9
But anyway it is what it is, price envy and short term thinking is 95% of all investment forums and at times was the focus of the old TMF Berk board. It seems we've moved from that.
A remarkable "so am I but what are you" sentence in this post.
For more than 20 years, Saul's investments have AVERAGED 29% CAGR.
Then in November of 2021 they spent 6 months going back to levels they hadn't seen since, wait for it, 2019. They have spent the last year in the doldrums, hanging around at levels they haven't see since 2019, but still a substantial gain over where they were at the beginning of 2019.
So Mr. "long term thinking" looks at the gains of the last more than 20 years, and looks at the gains in the last 5 years and... ignores them!
Instead Mr. "long term thinking" climbs on his high, but obviously extremely near-sighted horse and professes whatever he professes.
It is a remarkable thing to see such irrationality all in under the banner of rationality. If I could be so bold, I commend the nearly presidential quality of it!
****
OK know that I have deservedly lost you all by being a bit of flame-nut, let me talk to people who actually care to look at what is going on rather than praying to the local deities. Indeed, the last 2 years have not been a good time to be a Saul investor, although the last FIVE years are just fine and the last TWENTY years is truly remarkable. So what is going on?
Indeed as some of the more thoughtful commentators on this board have pointed out, Saul is NOT a value investor. His method consists of identifying growth stocks that he thinks will OUTGROW the other growth stocks, and then buy them. Saul does NOT attempt to pick between which Saul stocks are cheaper than others, he is simply betting that 50%/year growth will eventually prevail over any mispricing at his entry points.
And this has been right, on average, for a long time for Saul. One could say that on average, he has managed to harvest 30%/year (nearly) CAGR by buying companies that are growing at 50%/year. He doesn't manage to make 50%/year on companies growing at 50%/year, but seriously, 30% isn't good enough efficiency for a portfolio?
There are undoubtedly plenty of good reasons to prefer 13%/year from BRK over 29%/year from Saul Stocks. But pretending that there are not plenty of good reasons to prefer a lumpy 29% return over a smoother 13% return is, well, perhaps overplaying your hand.
AND not even realizing that the Saul Port has TROUNCED BRK as a stock over more than 2 decades, well how do you argue with something like that?
R:)
PS: yes it hurts and I am very sad that I am down by 2/3 or so from my peak on the Saul part of my port. But I'm pretty sure that "buy when it is fun, sell when it hurts" is the opposite of good trading advice, assuming by "good" we mean making money. -R
