$6 Party, page-51

To sell or hold/(short)?

Isn’t it ironical that we all invest in stocks to see their prices rise, and when they actually rise, we get nervous and itchy to cash out? Irony here: when we buy businesses, we are forward looking, and when we sell, we are backward looking.

Both Buffett and Fisher are only talking about evaluating businesses at regular intervals and whether they will remain good for years to come, and then deciding what to do with the stock – to sell or hold.

Warren Buffett has said repeatedly…
"We never buy something with a price target in mind. We never buy something at 30 saying if it goes to 40 we‘ll sell it or 50 or 60 or 100. We just don‘t do it that way. Anymore than when we buy a private business like See’s Candy for $25 million. We don‘t ever say if we ever get an offer of $50 million for this business we will sell it. That is not the way to look at a business.

The way to look at a business is this going to keep producing more and more money over time? And if the answer to that is yes, you don‘t need to ask any more questions."