Position Switch

Investing is a game of opportunity costs.

The goal?

Generate the most returns while taking risks you feel comfortable with.

Today it’s time to make a change in Our Portfolio.

We will sell one company and use the proceeds to buy more of two companies we currently own.

I should apologize

Every time I sell a stock, I should apologize.

You are an invaluable reader and there is only one reason why we decide to sell a stock…

… When I notice I made a mistake.

As Charlie Munger said:

“The best time to sell a great stock is almost never.”

The only valid reason to sell a quality stock?
One of the most wonderful companies in the world?

When you notice you were wrong.

The investment thesis is no longer intact and the company is losing (some of) its moat.

Today it’s time to sell a stock in Our Portfolio as I think there are better opportunities elsewhere.

And that’s why I want to apologize to you.

I made a mistake here and I’m taking full responsibility for it.

Unfortunately, making mistakes is part of the game.

We should always keep the rule of three from François Rochon in mind:

• One year out of three, the stock market will go down at least 10%

• One stock out of three that we buy will be a disappointment

• One year out of three, we will underperform the index

As Peter Lynch said:

However, this doesn’t mean I don’t feel bad about this.

I feel personally responsible.

That’s why I will try to share the key learnings with you.

Here’s what we’ll do:

• We are selling one company

• We are using the proceeds to add to 2 companies with more upside potential

Let’s dive into the company names.