No. of Recommendations: 16
The writeup is thoughtful and well-intentioned. If you'll allow me what's intended to be helpful coaching? What you're looking at and analyzing is pure momentum, sentiment and valuation. Because it doesn't get into any fundamentals compared to the valuations relatively, this list / approach tries to make judgement calls about risk/what to hold based purely on how they've done recently.

Investors like you will torture yourselves crazy with constant performance monitoring and comparing AND trying to guess at whether you should buy, sell, or "trim" based on the most recent price performance, especially in these hot SaaS stocks.

It is great that they are the hottest thing on the planet right now, and that Saul has exposed this wide vein of gold to mine. But I would diplomatically suggest not wasting your time obsessing about the size of the nugget each pick of the axe pulls off.

I know, because I learned this painfully myself 22 years ago and watched others do it at the advent of the 98-99 internet bubble.

Which is why the Mechanical Investing approach rose back then. At its root the only fundamental focus was screening for the highest growth stocks with the highest earnings growth. It was and is not as mindful as Saul's specific vertical focus on a sector/sub-sector. That out of the way, it removes the element of judgement or guessing on the horse race; you just pick a list of stocks meeting criteria (the "Saul screen"), buy equal amounts of the top 3,5 or 10, and then at a constant time interval you are comfortable with (3 weeks, 4 weeks, 3 months, whatever) you rerun the screen; whatever's fallen off that you still held, you sell, and whatever's new replaces those items. Hands off. No mid-interval guessing about what to trim and why (except for the advanced curriculum in blowoff top overpricing ;-). No fundamental analysis - it's just a list of symbols - nothing to get emotional about unless you want to learn something about it. If the approach works, the proof will be in the pudding as that section of your portfolio advances as a group.

I'm not suggesting that you switch to an MI screen. I'm merely suggesting a mechanical approach can be taken to this specific sub-sector, like any other specific group of companies that very few people have actual publishable insight into. What's better about this than general MI is, there's a very supportable fundamental rationale for The Screen to be picking stocks that will increase in price.

We are BLESSED on this board - generous people with deep fundamental insight into ANY given subsector's companies are RARE, and there are several here that understand WHY these truly awesome next wave software companies continue to grow at the rates they are. Rely on them to communicate that, to select the (small) universe of candidate stocks for the "screen".

FC
re-entered last month with a screen of similar criteria and an intended 3 month hold which has - with intent, but very lucky timing - picked up ZM,ZS,COUP,DOCU and a few names outside this group's focus.
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