Portfolio is up +2.9% YTD, with 88% of holdings beating or meeting EPS estimates. When to close a position, how I decide when to sell, and the 3 reasons I ever hit the sell button.
Really appreciate the detailed response! This is exactly the kind of grounded thinking that helps cut through the noise.
Your point about watching how management’s narrative evolves over a couple quarters really stood out. It’s so easy to overreact to one data point, but trends take time to validate. And yes, multiple confirming sources definitely help separate signal from noise.
Also love the distinction you made between short-term headlines and long-term fundamentals. Markets often move faster than reality, but that doesn’t mean our decisions should. Thanks again for sharing!
Great insights here! How do you personally balance sticking with a conviction versus cutting losses when market tides start turning? Would love to hear your approach.
Well, for one, one bad quarter does not make a trend. I like to see what happens over a couple of quarters, see how management's narrative evolves, and if I realize the narrative makes no sense or keeps changing, then I am out. Also, I get my info from a couple of sources, so I don't rely on what one channel check says about demand for a product, but if a couple are echoing the same info, then it indicates the tide is turning.
For example, if TSMC's sales growth is 35% vs the expected 40% this year, I am not worried (I may buy some more shares if the share price declines, as it doesn't meet street expectations) as I know TSMC has a monopoly on advanced chips and no one can build the infrastructure and secure the clients in the short term. However, if, let's say, China creates a new technology that is significantly faster/cheaper and can be produced at scale, then I am listening closely.
Also, it is very important to cut the noise from the signal. Case in point, the Israel-Iran conflict has been all over the news the last couple of days, and I saw some analysis and commentary on the impact of Iran closing the Strait of Hormuz on oil prices.....
But if you are really investing with a horizon of decades, will this conflict have an impact on your portfolio considering your investment horizon?, all the conflict and newsflow did was occupy the headspace of 'investors' that traded around the news (headspace they could have used for doing fundamental research) and at the end of the day nothing happened.
Apologies for the rambling, in a nutshell, if you do deep fundamental research on the industry and company, you will be able to tell what is just noise and you should ignore (and stick with your position) and signal (that indicates the tide is turning and you should evaluate your position).
Really appreciate the detailed response! This is exactly the kind of grounded thinking that helps cut through the noise.
Your point about watching how management’s narrative evolves over a couple quarters really stood out. It’s so easy to overreact to one data point, but trends take time to validate. And yes, multiple confirming sources definitely help separate signal from noise.
Also love the distinction you made between short-term headlines and long-term fundamentals. Markets often move faster than reality, but that doesn’t mean our decisions should. Thanks again for sharing!
No problem, I am glad it resonated with you :)
Great insights here! How do you personally balance sticking with a conviction versus cutting losses when market tides start turning? Would love to hear your approach.
Well, for one, one bad quarter does not make a trend. I like to see what happens over a couple of quarters, see how management's narrative evolves, and if I realize the narrative makes no sense or keeps changing, then I am out. Also, I get my info from a couple of sources, so I don't rely on what one channel check says about demand for a product, but if a couple are echoing the same info, then it indicates the tide is turning.
For example, if TSMC's sales growth is 35% vs the expected 40% this year, I am not worried (I may buy some more shares if the share price declines, as it doesn't meet street expectations) as I know TSMC has a monopoly on advanced chips and no one can build the infrastructure and secure the clients in the short term. However, if, let's say, China creates a new technology that is significantly faster/cheaper and can be produced at scale, then I am listening closely.
Also, it is very important to cut the noise from the signal. Case in point, the Israel-Iran conflict has been all over the news the last couple of days, and I saw some analysis and commentary on the impact of Iran closing the Strait of Hormuz on oil prices.....
But if you are really investing with a horizon of decades, will this conflict have an impact on your portfolio considering your investment horizon?, all the conflict and newsflow did was occupy the headspace of 'investors' that traded around the news (headspace they could have used for doing fundamental research) and at the end of the day nothing happened.
Apologies for the rambling, in a nutshell, if you do deep fundamental research on the industry and company, you will be able to tell what is just noise and you should ignore (and stick with your position) and signal (that indicates the tide is turning and you should evaluate your position).
I hope this helps!