what do you do to stay patient?

[phil_Buffett]

iam often to unpatient and sell after a gain and miss the big gain. for example i sold a stock with a 35% gain after a very short time, but then the stock goes up to a 100% gain. i have very often the same Problem.

 

what do you do to be more Patient?

 

 

[writser]

Get a life :) Seriously - non-finance related stuff. If you stare at your screen all day it's hard not to get suckered into the action by mr. Market.

[Packer16]

I set a price target and compare upside to other stocks available and will only switch if I can find 2x the upside of what I am selling.

 

Packer

[jouni1]

my approach is the other way around. i buy to hold, not to sell.

 

so my sells are not because of target prices, but because the underlying business has gone bad or the stock is super overvalued.

 

i understand the gains might not be as great in my strategy as in a buy low - sell high strategy, but i find great undervalued companies so rarely, that it's hard for me to let go of them. the ideal situation for me is that over the course of the next 20 years i add 10-15 companies to my portfolio when undervalued. maybe sell a few but preferably none.

[Uccmal]

Phil_ :

 

I am trying not to sound flippant. 

 

It comes down to a few things:

1) Conviction: BAc as an example - I have a rough target of 22-25 where I want to be down to a smallish position.  I sell down as we get closer to the target, unless the aspirational target is revised upwards along the way, which it has been.

 

2) Experience: learning what works for me, personally over time.  I trade frequently around a larger position which satisfies my restlessness.

 

3)  Avoid full motion video discussing your investments: TV, YouTube type stuff, continuous news feeds.  Our brains seem to be adapted to react to video versus reading and pictures. 

 

Other advice as above although I follow my stocks closely, I look for news if there is a sudden rise or drop in a stock.  Usually there is no reason, so I do nothing.

 

cheers!

[cwericb]

Jeez, my problem is the direct opposite.

 

Probably greed causes me hold on to stocks long after they hit their highs. SFK/FBK being a good example. Bought a substantial amount at .50 then some more at about .90. Then watched it run to $2.00, but I let it drop back to about .85 before I finally dumped it.

 

I have also held stocks and let them go to zero. Now this isn’t the “grocery money” and holding long term major positions in stocks like FFH, RY and BOX.UN has done quite well for me over the years, but I really have a hard time selling anything. 

 

I have thought of using down limits but I have quite often seen sudden dips and a quick recovery that would have triggered an unwanted sale.

 

Part of my problem is probably due to the fact that my time to spend on this is relatively limited. Anyone else have a habit of hanging on too long?

[Uccmal]

 

"Part of my problem is probably due to the fact that my time to spend on this is relatively limited. Anyone else have a habit of hanging on too long?"

 

I used to.  I tell myself that I can always buy it back.

[Palantir]

Get a life :) Seriously - non-finance related stuff. If you stare at your screen all day it's hard not to get suckered into the action by mr. Market.

 

This. Just stay away from the finance sites.

[Guest valueInv]

Have a day job.

[alpha231616967560]

Great question.

 

Mostly I read to stay patient.

 

Sometimes I read about investing heroes or other people who I admire. They are almost always people who have managed to be patient or otherwise perseverant in difficult circumstances.

[frommi]

I don`t view it as so negative, when you have something better with more upside potential why not switch? 35% in a short timeframe is not too shabby and you simply don`t know what the stock will do next. There are only very few stocks that you can hold forever and most of the time you know it only in hindsight. And when you don`t sell after 35% you probably aren`t able to pull the trigger at 100% either. But at some point the undervaluation is away and you have to rely only on the business running well. The margin of error has evaporated and without it the holding is now a lot more risky.

[Guest longinvestor]

FWIW, my patience holding a large amount in BRK is supported by the thought that in tough market conditions, the probability of them putting more birds in the bush goes higher than normal times. Longer the duration of the downturn the better. Fortunately most of my capital base is not needed until much later, I believe I can handle it OK for a few years.

[investor-man]

I set a price target and compare upside to other stocks available and will only switch if I can find 2x the upside of what I am selling.

 

Packer

 

This is reasonable. Follow up question, do you often sell before long term capital gains sets in?

[SharperDingaan]

Not popular but we prefer the use of margin for exactly this reason;

when proceeds pay down margin, it really puts a brake on activity  ;)

 

SD

 

 

[Packer16]

Most of my assets are in tax advantaged accounts (IRAs) so I am not concerned about taxes.

 

Packer

[anders]

Great question.. Selling I consider to be one of the hardest part in investing.. Many value guys invest on the way down and then scale out on the way up, only to see the investment advance further up when they are out.. I still have some problems with selling but are getting better.. I usually say that everyone that bought my shares when I sold it would be very rich today.. lol..

 

My solution is to take away the fixation of price and focus on the business itself.. I remember buffet saying in an interview that he only look at the price at the very end because otherwise he will be influenced by that.. So, same logic should go for selling.. Every number you think about as a solution to a problem will affect you.. So in my opinion it is better to look at business internally first and at that point decide it you want to continue with the business or not.. if I reach a no answer, or realize that I made a mistake, I sell it to the market no matter the price..

 

I believe that you will always outperform if you can find winners at a reasonable price tag and then stay with them "forever".. Good example is BRK, I bought it years ago and have not looked at the price for years because I believe in the business, and the price has gone up and down over the years, but is still the gift that just keep on giving.. It is no random chance that Buffett waited 50 years to buy coca cola and still holds it in the portfolio..

 

There is truly powerful wisdom behind the simple words from the oracle "It is better to buy a wonderful business at a fair price, than to buy a fair business at a wonderful price"

[dpetrescu]

I think the answer depends on the investing approach. Why ever sell if you can help it? If you can find a company that you believe is structured to do well for many decades regardless of who might be on the board or who might be the executives in the future, that is the best approach. Pay a little extra and go travel. You never have to sell. You just have to manage cash kept on the sidelines and buy more at opportune times when shares are on sale. Every 7 or so years there will be a Black Friday type sale when a recession is officially announced. Unfortunately, recessions are like apple announcements, you never know when it will take place and what exactly will be announced. But we do know for sure they will take place.

[dpetrescu]

I should add I'm still looking for my forever stock. I confess that I do not and have not ever owned Berkshire. I was always strenuously looking for the gold needle and didn't think to consider the haystack of gold.

[yadayada]

before all my important decisions I masterbate. Highly recommended.

[Palantir]

^ TMI brah.