Re - Selling winners
the Key phrase is "in a short period of time". He cites a couple of examples where selling those winners would have been a mistake, but did those stocks go up a lot "in a short period of time"? I don't really know?
My take is that intrinsic value is a moving number but it's probably a slowly moving number. If I buy a stock at 50$, that I think has an intrinsic value of let's say 60$, and the stock goes up to 80$ "in a short period of time", when he intrinsic value has not changed much supposedly, I think I would sell. Sure there might be something hiding in this move, that I don't know about, but who knows. Unless I have a strong hunch, I would tempted to sell, because in my book, something that is supposedly worth 60$ but trades at 80$, is not a value any more.
I have lost appreciating this way many time, but I have also done roundtrip with the same stocks 3-4 time, buying and selling at almost the same price points.
Again, we just have a relentless bull market and brains are wired to react to their last experiences with the bear markets being distant memories. Market's don't care at which points you buy or sell your stocks, they do their things, sometime rationally but often enough not. |
