Thread by @RamBhupatiraju

That quote about "Vision to see, courage to buy and patience to hold" is one of my fav quotes about investing.

If I'm buying high quality companies (that I understand and intend to hold for a long-time), I've rarely regretted buying them during big drawdowns.

The important thing is to be right about the quality/durability but more importantly having the tenacity to hold them for a long time as they go thru some business volatility and lot of Market volatility.

For someone going the "individual stocks for the long-term route" they would be buying (companies in their circle of competence) for the growth in intrinsic value.

Through that long journey of holding there will be numerous bumps like

-Company specific strategy/execution issues (hopefully that they can overcome)
-Recessions
-Fed actions
-Market cycles

So it's silly to think that the Business will keep executing along the way w/o coming across few issues, w/o missing few quarterly "estimates", and especially that the Market will always favorably value your holdings.

Here's how I think about it.

For me personally there aren't more than 100 businesses that are in my true investable universe worth considering for my capital.

This is based on
-Geography (mostly US focused, unless I come across some exceptional international Cos)
-In attractive Sectors that I'm interested in following
-Having the desired Quality, Growth, Management, Financial strength and other important metrics.

So when I'm buying and holding the 2-3 dozen companies from that universe, I would like to minimize churn unless there's a valid Business reason or a good Portfolio reason.

Concentrating on the few companies that interest you, that you have conviction in and then building positions in them slowly over time as they execute (so that you buy at all types of "valuations") is one of the better ways to go about individual stock investing.

If you are really correct on the Business durability, there will be plenty of time to build the position (a critical point I missed for many years).

With that said, holding purely for the sake of LT holding is also silly.

The normal scenarios I sell are
-Position justified it's objective. This happens when something was purely bought for undervaluation reason (and not for LT growth) & valuation gap closes with recovery.

-A position bought for long-term ran up too much too quick, mainly due to Market mania rather rather than business growth. This usually happens when you buy during crashes and it recovers too high too fast. I usually trim in these scenarios rather than selling out completely.

-Selling due to thesis busted or not materializing quick enough (need to get better on the latter).

-Trimming/selling to accommodate a better
Risk/Reward position (doing it more these days).

-Trimming due to Portfolio weightage (rare).

One thing we need to avoid is treating whatever is happening today in the Market as a permanent state of affairs.

If Market is going down, thinking that it'll keep going down.

If the stock is down for a missed quarter, thinking that the story is over.

Businesses & Markets are constantly changing but if you focus primarily on the Business direction & value, and use the Market opportunities to build your pos (while also selling for the right reasons as outlined in your process), the LT results are usually quite satisfactory.

All of this is just talking out loud. Not advice.

Every investor has their own goals, risk tolerance, cash needs, reactions to bear markets, long-term objectives etc. Act accordingly.

/END.