Thread by @AReviewOrTwo1

15 things that I think about when trying not to sell a good L-T idea:

1. Be prepared to give up P&L in the S-T, L-T winners are often volatile

2. Monitor consistency between narrative & fundamentals. Imagine the destination & the key drivers. Use patterns to help navigate

3. Understand why something is persistently mispriced (confidence in a mispricing means you are less likely to sell)

4. Have a well balanced portfolio of great cos, never let a position become so big it owns you / can take you out of the game

5. Form independent views and rigorously test your thinking by yourself, a lot of people will have opinions about the future without knowing much about a situation, you need a strong filter... sometimes not listening is a good thing...

6. Understand the short case better than the bears. For great stocks there is often a persistent short / bear case... usually it relies on static analysis without taking account of the changing dynamics at play or understanding true incentives and the perspective of the customer

7. Understand the customer perspective & what makes a company’s offering unique - including why can’t the competition compete away the growth & profits

8. Recognise that some of the skills required to hold on are not the same as analysis, it is more of a psychological battle

9. Understand in detail what non-valuation reasons would make you sell before you need to, if you don’t see those signposts, don’t sell

10. Understand your valuation is likely wrong, know where it is conservative, eg does it assume a fade that might not happen

11. Think about the culture of the company, is it a culture that will likely produce innovative new products, ideas and expose the company to new S-curves... recognise the limits of your imagination and that people don’t model what they can’t see

12. Don’t take price targets seriously, understand that you own a business, a productive asset, a collection of people - you will do very well by owning the right productive assets and partnering with the best people over the long term, not by trading in and out of them

13. If it helps you stay in a name, trim a little (although make sure to add on volatility). Sizing can be used to balance uncertainty... it doesn’t need to be all in or all out... accept that sizing is always ‘wrong’, you will be too small in the winners & too big in the losers

14. Understand the typical mental tricks that make you sell long term winners eg: Blunt / conservative valuation analysis, being worried about quarterly results, taking profits, listening to people who don’t know what they are talking about or have biases

15. Understand many successful investors do very well by finding and sticking with great companies for a long time (eg Graham, Akre, Fisher, Nomad and many more) - it is something that works if you apply good judgement and execute well