“I’m wondering what your present self has to say to the past self who wrote the above, especially the paragraph in bold. What’s changed?”
I am not Saul but I just wanted to give my view for whatever it is worth: everything changed and nothing did.
I guess there is always the risk especially in the financial sector of ponzi schemes, creative accounting, cooking the books, lying to auditors etc…you can only judge what you can see and the numbers did (and still) look great.
It is just that some accept the risk and focus on the longer term thesis playing out while some others cannot bear the risk and would flee at almost any bad news. The bad news may often turn out to be noise and be irrelevant. But it could also have turned out otherwise.
nobody can really know. No one.
Saul said: “I decided that the prudent course of action was to reduce my position, not because I was sure there was anything wrong, but because I wasn’t sure that everything was okay.”
well I can never say that ‘everything is okay’ in any of my investment because I know there will be things that I will not know about that business. That is the risk.
Maybe the best thing to do would have been to tune out for the past 6 months and not listen to all this drama.
Even when you hear about this or that news, you can never be sure how it will affect the stock, or often times if it is even relevant to the future of that business. Certainly it was hard ‘not to do anything’ in the face of these allegations. But I think if you take a long term view and focus on the long term thesis of why you put money in in the first place then you would be less inclined to move money in out with the news of the day.
Note again that those allegations could have been true but that is not the point. The point is to focus on the thesis playing out over a much longer term for each business we decide to invest in. We could be right. We could be wrong. But reacting with the news of the day is not the way I roll.
tj