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No. of Recommendations: 26
I applaud Saul's ability to focus on a single theme, but psychologically I'm trying to wrestle myself to gravitate in that direction (old dog, new trick sort of thing)


I stumbled upon this board back in October, and have almost completed my portfolio transition from similar companies that you own, to those companies discussed on this board. There are few referenced posts on the right side of this board under the "Announcements" heading that should definitely be read many times over.

Why My Investing Criteria Have Changed

Saul's Knowledgebase (Parts 1 - 3)

Sometimes when you read, or hear, something, the internal light bulb goes off and any sort of doubt or hesitancy just falls away. Like you, I was invested in big companies like Google, Berkshire, Boeing, IBM, etc, and used them as my "security blankie." I figured they were so big and insulated in people's everyday lives that the downside protection would always be there. Through those posts referenced above, I instantly realized that I wasn't giving enough thought to the UPSIDE limitations of those 800 pound gorilla stocks.

Think for a moment about Apple, and the company's flagship product (the iPhone). While Apple doesn't give total unit sales anymore, they were selling about 60-70 million phones per quarter last year. Thats absolutely incredible, but to even grow by 10% going forward they'd have to sell another 6-7 million additional phones every quarter into an already saturated market. How realistic is that? And that is to only grow 10% mind you. Can you even imagine the stock price doubling in a few years? Compare that to some of the smaller, SaaS companies discussed here. Many of them are growing revenue at upwards of 40%, 50% and 60%. When you are growing that fast, doubles (and triples) happen much, much faster.

You mentioned fear, hesitancy, secure, defensive and comfort a few times in your post. There is nothing wrong with those words, nor is there anything wrong with a no-stress index fund for those aiming to keep pace with the market. That used to be me, but it isn't anymore. The light bulb went off in my head. I'll leave you with a final question. In terms of fear, what is more frightening - investing in a company that is already at the peak of market saturation, has to selling their product all over again to the same people, and then some, merely to grow 10%...or investing in a company with an infinite horizon of potential new customers, with revenue growing at 50%+ and that automatically recurs every single month?

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