While remaining disciplined in terms of the process of stock-picking, the seasoned value investor waits patiently for Mr. Market to provide opportunity.
Typically, there are just four reasons to sell:
1. A clear deterioration in either earning power or ‘asset’ value.
2. Market price exceeds ‘fair’ value by a meaningful margin.
3. The primary assumptions, or expected catalysts, identified prior to making the investment are unlikely to materialise or are proven to be flawed.
4. An opportunity likely to yield superior returns (with a high degree of certainty) as compared to the least attractive current holdings is on offer.