Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (32) | Ignore Thread Prev | Next
Author: rationalwalk Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 210394  
Subject: Re: Still cheap at 4 year high Date: 10/5/2012 10:28 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
Maybe the best solution is to think about the business and not the stock price?

Of course that is the proper way to look at things, but nearly all investors have psychological biases related to stock prices (anchoring, waiting to "break even", depression when a stock price falls immediately after buying, euphoria when a stock price rises rapidly, etc). Obviously not everyone suffers from all of these biases. But most people are affected to one degree or another.

I very much doubt that I will sell any shares until I need the money for living expenses.

Then that would ignore any price to value considerations between now and then. In my opinion, a security should be sold if the after-tax proceeds from a sale can be reinvested in another opportunity that has a high probability of achieving better long term returns adjusted for differences in business risk. A security should also be sold if prospective returns appear to be very low going forward even if a replacement security cannot be immediately found. In such a situation, cash is a residual that Buffett views as a call option on every asset class:

http://www.theglobeandmail.com/globe-investor/investment-ide...
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (32) | Ignore Thread Prev | Next

Announcements

2013 Feste Award Voting Begins!
Who will win the 2013 Feste Award? Vote now for the Fool that most exemplifies the Fool Community mission of Learning Together!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Tax Strategies

TMFPMarti-Feeling Good
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement