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Lessons learnt of the last 7 years, among other things



January 11, 2013 – Comments (4) | RELATED TICKERS: VLCM.DL , MWA , COLM

a) Passionate management is great to have, but may not be able to execute. It's very hard to find a combination of passionate management who are good operators in a huge potential market.
b) A strong moat tends to lose its meaning if your customer is essentially broke i.e. sometimes, a good moat may not be enough. 
c) There is usually a very good reason why a stock is trading for cheap or lower valuation for years. Make sure you understand that reason.
d) If it seems too hard to understand, it's probably better to leave it alone -- however clever the thesis may appear.
e) At some point, if you find yourself hoping for too many things to occur for your thesis to work out -- you may have to consider that you have gone from "buy and hold" to "buy and hope".

4 Comments – Post Your Own

#1) On January 11, 2013 at 9:57 PM, Option1307 (30.61) wrote:

Great thoughts!

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#2) On January 11, 2013 at 11:44 PM, TMFtheEdge (99.73) wrote:

Thanks, Option1307

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#3) On February 04, 2013 at 3:56 PM, lemoneater (57.86) wrote:

"Buy and hope" great phrase, but not so great practice of mine :(.

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#4) On February 21, 2013 at 11:52 AM, TMFtheEdge (99.73) wrote:

Hi Lemoneater (great name by the way!),

I suppose that one often realizes too late when the mentality of "buy and hope" has taken over the thesis of the stock. That includes myself, of course. Over time, I hope to be more ruthless with my wishy-washy positions -- however, to be sure, I still favor the exponentially positive favorable outcomes from long term buy and hold. That's my default approach which I trust. 

I would be glad to just make less mistakes or as Munger would have put it, not make my full statistical share of mistakes.    

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