The all-important 'SELL' decision
That solid 'franchise' that you bought two years ago and the one that had a strong margin of safety has given you attractive returns and now you wish to dump it. Dump you should if you've found another equally attractive opportunity in another equally strong 'franchise.'
But that is seldom the case. Furthermore, selling involves transaction costs. For these very reasons, Buffett is against the concept of selling strong 'franchises' unless their performance looks weaker from a long-term perspective. This is what he has to say on the issue.
"If the work is done right while investing in a stock, the time to sell it is never." Furthermore, he adds, "Our holding period is forever."
In Buffett, we have someone who has walked the talk and has remained invested in business for years together. Indeed, the urge to sell is very high, but you would do your investment returns a world of good, if you continue to stick with good, solid 'franchises' for years together.
Image: Stock traders work at a local brokerage firm in Mumbai. | Photograph: Sajjad Hussain/AFP/Getty Images
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