Great question and let me share my perspective on it: Investing is all about probabilities, no one knows everything - even the CEOs don’t. That’s why portfolio allocation sizes have to be appropriate. If I had been 100% sure about the development, I’d have allocated 100% in S but I haven’t (and never will).
In my evolving investment strategy, I’ve begun giving major props to the people running the show at a company – the management, leadership, culture, and the vibe they bring to the table. Before I invest my first $ into a new business, I’ve got to have this gut feeling that I can trust them. If I can’t, I won’t invest, regardless of how great the raw numbers look. If I trust them, I consider them as my team.
So, I started listening much more to what management is saying and how they say it. If their talk makes sense to me, I’m sticking with my team, maybe making some tweaks here and there. Take Sentinel, for instance, after going through the numbers and listening to management, I convinced myself there wasn’t some major screw-up happening with them, so I rode it out, and it paid off (laid it out in that old post).
For sure, in my next 30 years of investing, there’ll be moments when I pull a similar move and maybe goof up. Hopefully, I’ll be more right than wrong.
Hope it helps!