When to sell is one of the most difficult questions investors have to face.

The best answer I've found comes from a chapter in a book that Warren Buffett called one of the best books on investing.

Here's when Philip Fisher tells investors to sell ... and when not to. Fisher says there are 3 reasons for investors to sell a stock and 3 reasons not to sell.

If these reasons are to be believed, then often when we should SELL we HOLD and when we should HOLD we SELL.

Few things are more important for investors to get right!

Mark Mahaney has covered Internet stocks on Wall Street since 1998.

He is in the top 1% of all professional analysts, w/ an avg annual return of 26.9%.

In his book, Nothing But Net, he shares these 10 tech investment lessons he's learned after 25 years of making calls. Lesson 1: There will be blood when you pick bad stocks

"There will be blood" is a simple way of saying that you will lose money when you invest in the market, especially when you buy bad companies.

As Mahaney puts it, "Investing requires grit."

Stocks discussed: $APRN $GRPN

Mark Mahaney has covered Internet stocks on Wall Street since 1998.

He is in the top 1% of all professional analysts, w/ an avg annual return of 26.9%.

In his book, Nothing But Net, he shares these 10 tech investment lessons he's learned after 25 years of making calls. I'm currently reading through Mahaney's book for the second time since getting it last year. I whole-heartedly recommend the book.

Most of these 10 lessons apply to investing in general, not just the tech sector.

As an investor, I want to buy and hold companies that will be around for a long time to come.

If you want proof that a company might have staying power, look to see how long it has already been around.

Let's discuss the Lindy Effect and examine why this is true. The Lindy Effect is a theory that states the future life expectancy of certain things (e.g. ideas, technology, etc.) is proportional to its current age.

In other words, the longer something has been around the longer it will probably be around in the future.

When to sell is one of the most difficult questions investors have to face.

The best answer I've found comes from a chapter in a book that Warren Buffett called one of the best books on investing.

Here's when Philip Fisher tells investors to sell ... and when not to. Fisher says there are 3 reasons for investors to sell a stock and 3 reasons not to sell.

If these reasons are to be believed, then often when we should SELL we HOLD and when we should HOLD we SELL.

Few things are more important for investors to get right!

This is one of my favorite rags-to-riches stories:

Just months before the onset of the Great Depression, a 3rd -grade educated entrepreneur opened a general store in rural Kentucky.

Today, that single location has grown into a 19K-store retail empire. Luther Turner opened his first store just before the Great Depression. Even though he had a 3rd grade education and could barely read, Luther's store was still successful, mostly by acknowledging he wasn't smart and could learn something from everyone.

Let's discuss one of the most underrated entrepreneurs in history.

He launched not 1, not 2, but 3 multi-billion dollar public companies.

Here's how he did it: Being a South Florida native, I don't think Wayne Huizenga gets the credit he deserves.

The companies he took public (in chronological order) are Waste Management $WM, Blockbuster Entertainment, and AutoNation $AN.

Most of these notes are from:

Warren Buffett called Philip Fisher's book, "Common Stocks and Uncommon Profits," one of the best books on investing.

It might be my favorite investment book ever, so much wisdom inside!

Here is Fisher's 15-point checklist of questions to consider before buying a stock: Point #1: Does the company have products or services with sufficient market potential to make possible a sizable increase in sales for at least several years.

Fisher is not looking for a one-time spike in revenue, but a long runway of growth.

Shelby Davis is the best investor you never heard of.

He turned $50K into $900M, a 23% CAGR!

Here's how he did it... Davis didn't start investing until later in life, in his late 30s. Before investing, he was an economic advisor to NY Governor Thomas Dewey and a freelance writer.

In 1947, his wife received an inheritance from a family-owned furniture chain, and he began investing.

1/ I believe it's rational for investors - especially US investors - to act as if the stock market will always go up over the long term, even while intellectually acknowledging this might not be the case.

Using the logic from a 17th-century French philosopher, here's why ... 2/ First, a brief detour.

Sometimes people ask me if they should invest because what if something "bad" happens?

Scenarios vary, but people have asked me about nuclear war, global natural disasters, worse pandemics, terrorists, etc.

This is how I think through those things.

On September 4, 1998, exactly 24 years ago today, Larry Page and Sergey Brin founded $GOOG while they were PhD students at Stanford.

The two were perfectly suited to collaborate on something like $GOOGL, w/ Page focused on user-interface design and Brin on data mining. 2/ In 1995, the newly dubbed world wide web was exploding, w/ more than 100K web pages by the end of year. But there was no easy way to find something on the web or sort these pages.

One early solution was to painstakingly index each and every page, like the Yahoo folks did.

I feel like you could do a lot worse than owning $DG in today's economic environment.

In Q2:

Sales $9.4B, +9%
Same-store sales +4.6%
EPS $2.98. +10.8%

"We feel very, very strongly that peak margins haven't yet been obtained and that we have a lot of room to grow."

https://twitter.com/Matt_Cochrane7/status/1564270398098784259

DG Fresh, the company's initiative to reduce product cost on its frozen and refrigerated items and drive sales in the refrigerated category, is now live across 19k stores.

3k stores will be selling produce by end of the year. Eventually $DG believes 10k stores can carry produce

1/ Hey Zuck, if you're really serious about $FB winning in the metaverse it's time to play some 3D chess.

Start by making a HR bid to acquire Take-Two Interactive $TTWO, the video game studio home of Grand Theft Auto, Red Dead Redemption, NBA 2K, and now Zynga.

Here's why... 2/ You could probably come to terms for <$25B, well within your budget. The deal would give $FB some of the world's most popular video game IP, making a game pass on Oculus attractive or even some exclusive content.

Added bonus: Bring Farmville home to FB news feeds!

1/ Repeat after me: You don't have to time the bottom.

From Oct 2007 to Apr 2013 (5.5 yrs), S&P 500 was down an average of 21.2%.

For 2 full years, it was below that mark.

Any time during that 5.5 yr period was a spectacular buying opportunity for long-term investors. 2/ Focus on buying companies with competitive advantages.

Focus on buying companies at decent valuations.

Do not focus on timing bottoms.

1/ Adobe $ADBE reports soon, thought I'd share a few notes on one of my favorite companies that has thus far resisted the SaaS sell-off.

$ADBE is high-margin (op margins consistently above 30%) and consistent +20% revenue growth.

All clipped comments from CEO Shantanu Narayen. 2/ This quarter, $ADBE did complete the acquisition of Frame.io, a leading cloud-based video collaboration platform. Just another feature that makes its bundle a little stickier and keeps customers from looking at the competition in a remote work world.

Is there any way to make sense of this chart without concluding that China's gov't doesn't care about shareholder wealth and has far different priorities?

I think @michaelbatnick shared this on The Compound a few weeks back and I can't stop thinking about it. When investors talk about China, they keep mentioning business risks. I agree, at these valuations, you're taking on very little business risk!

But more than ever, when investing in China, you're trading business risks for geopolitical risks. IDK if that's a great tradeoff.

I think $SQ just dropped their Q2 results? Late on a Sunday afternoon lol.

Gross profit $1.14B, +91% YOY
Adj EBITDA $360M, +268% YOY
Cash App profit $546M, +94% YOY
Seller gross profit $585M, +85% YOY
Net income $204M And $SQ is looking to acquire Afterpay! 👀

yourir.info/resources/8e2c…

1/ The obligatory $FB Metaverse thread

Investors mad at Zuck for wanting to spend big on the metaverse are missing the larger point. I don't think Zuck's vision for the metaverse is fantasy or something that will cost billions but fail to generate profits. Here's why .... (cont) 2/ One of the Q&As between an analyst and CFO Dave Wehner center around how much it will cost. Wehner confirms it's going to be in the billions.

Another analyst asked about expense disclosures of VR/AR, noting that 20% of headcount seems to be working in that dept (cont)

1/ Here we go, a thread of Facebook $FB earnings quick takes.

Revenue: $29.1B, +56%
EPS: $3.61, +101%

Huge YOY raises, but that's coming off COVID lows too.

investor.fb.com/investor-news/… 2/ Here's the historical growth and the current TTM growth rates of $FB's revenue and EPS.

With $13.50 in TTM EPS, that gives $FB a P/E ratio of 27.6 at today's closing price.

1/ Really quick $MSFT takes: So many seemingly small and insignificant businesses inside Microsoft are growing into real revenue streams.

Gaming, security, and LinkedIn all $10B annual rev for 3 years running.

LinkedIn rev +46% YOY
Dynamics 365 rev +49%
Azure rev +51% 2/ $MSFT is a $2T company growing revenue +21%, net income +47%, operating income margin of 41%. That's incredible.

Intelligent Cloud is now the company's clear leading segment, growing the fastest.

1/ Special edition of #FF for my favorite fintwit writers.

But first a THREAD on why we're in a golden age of financial commentary.

All too often, I hear something along the lines of, "They have a Substack now too? Does everyone have one now?"

This drives me crazy! (cont) 2/ As if writers breaking away from the SEO algorithmic overlords is a bad thing!

We're now getting content that is so much more original and interesting. When content comes from writers' passions, and not lame attempts to base pieces off of stupid formulas, that's good! (cont)