| | | If I pick a basket of 100 stocks, that basket will probably outperform. If I choose only 10 stocks, especially if I weight the stocks I like best higher, %-wise, that portfolio is much more likely to underperform. At least during some time periods. That makes me doubt yourself and increase the risk of selling near the bottom, or way too early anyway.This is one of the things that I notice when I study my own stock market track record.
For me, I have found that the best thing is to not look at valuation overly much. Also, not to be too afraid to buy something that is going up. Try to disregard the stock chart. Buy businesses that have favorable underlying economics, and that are well-run, with competent and honorable management in place.
Basically, I try to fall in love with the companies and buy them for keeps. I don't have to marry just one, but I try to marry them. More and more, I try to do "one time decisions" and just keep 'em. If the valuation gets way out of whack, I have trouble resisting the quick profit. But I find more and more that the really worthwhile profits are won while waiting (the "sitting on your ass" stuff that both Munger and Livermore spoke about a lot). |
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