Ann: Completion of Retail Entitlement Offer, page-201

"as Buffet says if you can't handle your stocks being down 50%+ you are not financially and psychologically prepared. So don't do it."


The key part here is "as long as you're comfortable with the holding". Buffett has referred many times to the incredible level of detail he puts into his due diligence process. Therefore it stands to reason that he is only buying stocks when he is absolutely convinced that the business is sound. If the price of the stock deteriorates by 50%, as long as the business continues to represent the same value, he will hold.

But if the business no longer represents sufficient value, you can be certain that he would sell. Holding a stock that is down 80% on a year ago is not some badge of honour that allows you to compare yourself to Warren Buffett.

I'm also pretty sure that Buffett would not be publicly expecting rebounds of 300% or more as his holding slid to a fraction of its original value. The fact that none of these predictions have eventuated should produce a little more humility from those making them.

I would urge caution when considering the arguments around the value and price of Appen:

• Appen has a vested interest in projecting itself as being in a strong position with a positive future.
• Holders commenting here have a vested interest in believing in the company's position and rejecting any opposing view. These are the "true believers and stoic investors".
• The broader market of those who are following the company and either selling it or declining to buy have a vested interest in arriving at a realistic view of the company's vaue and price.

I also find it deeply concerning at how strongly the "faithful ones" are policing the thinking here and trying to suppress the arguments of those that don't align with them.