We sell for four primary reasons: when the price reaches our appraised value; when the portfolio's risk/return profile can be significantly improved by selling for example, a business at 80 percent of its worth for an equally attractive one selling at only 40 percent of its value; when the future earnings power is impaired by [...]

Given the tax implications of selling, the cost of trading, and the challenge of getting two appraisals right, John Templeton used to have what he called the 100 percent rule, meaning the upside should be at least twice as high before swapping out one position for what you consider a more attractive one. We similarly [...]

Classic opportunities for us get back to time horizon. A company reports a bad quarter, which disappoints Wall Street with its 90-day focus, but that might be for explainable temporary reasons or even because the company is making very positive long-term investments in the business. Many times that investment increases the likely value of the [...]

Our view is simply that superior long-term investment performance can be achieved when financially strong, competitively entrenched, well-managed companies are bought at prices significantly below their business value and sold when they approach that corporate worth. The quantitative piece of that is that we only want to buy when we can pay less than 60 [...]