I’d love to hold a stock forever, but sometimes you need to know when it’s time to sell or trim a position. SA is more of a hold forever, and the rare times they do sell, a stock has usually plummeted in stock price and after quite some time of holding, deciding that it’s time to move on as a very last resort.
I was complaining about this on another SA board recently, but I have to admit the response I got was pretty convincing: that losers can only lose 100% while winners like AAPL, NFLX, and AMZN have gone up over 1000% since first recommended.
So if you’re buying in equal amounts, you can pick 9 almost total losers and it only takes one 10-bagger to more than compensate. I started building a list of losers: WPRT, FEYE, SODA, RST, COH, etc. but could get to nine that were down more than 90%. And, typically, you’re not buying in equal amounts.
SA re-recommends stocks doing well, and yes, stocks that they feel are wrongly down beaten (which sometimes go down even more!). So, yes, while they may re-recommend a WPRT, they also re-recommended NFLX during its Quickster debacle (which I stupidly ignored thinking Hastings was out of touch, which he was in terms of what customers wanted but not in the overall business model), which was a super-great call on their part.
I don’t have the links handy, but a few people have posted that if you bought all of SA’s recommendations and re-recommendations and NEVER sold any, you’d be ahead versus doing both the buying and selling they recommended. Oh, and nicely ahead of the market, too.
That all said, I’m actually with Chris in terms of my actual behavior. I don’t buy most things that are recommended. I don’t necessarily sell the ones I own when recommended. I look at the companies and decide which ones “I like.” Meaning I like what the company does (I stay away from oil & gas, military, and a few other industries), and I believe the company has some combination of a good story in a growth industry, superior management, product/price moat, etc.,
I’ve done pretty well, but I keep reminding myself that I didn’t start this journey until March 2009 - which is when I decided to convert my 401K to something actively self-managed after my “safe” retirement-oriented mutual funds lost well over half their value. I’m up quite a bit versus just keeping my money in those funds, so that was a good choice to me, and at a very opportune time. But, I do realize I haven’t held individual investments during a real bear market, and that’s the real test of one’s portfolio management skills.