During their latest episode of the VALUE: After Hours Podcast, Travis, Taylor, and Carlisle discussed Dealing With Selling Too Early. Here’s an excerpt from the episode:
Tobias: Yeah, probably. The time to buy Microsoft was when Whitney Tilson was pitching it at Value Investing Congress in about 2010, 2011. That was when they’d had that one-year– [crosstalk]
Jake: Revenue roll over.
Tobias: Revenues had gone down. Steve Ballmer was running it. I think maybe Google had brought out Sheets and a few other things like that. So, it looked like they were going to be left behind, because everybody was going to be downloading their Office Suite, the Google Office Suite. That would have been a good time to buy it. That would have been a good time to buy Microsoft and get lucky and just hold on.
Tim: We bought it, but we just didn’t hold on as long as we should have.
Tobias: Yeah, you get 20% bump.
Jake: Yeah– [crosstalk]
Tim: Yeah, that can be the tricky part. It’s a lot of those.
Jake: You made all the easy money. [laughs]
Tobias: That’s what I feel about Meta a little bit. I think Meta probably does just continue to work from here. Whatever the bump I made out of it, I don’t know, I haven’t calculated it, but it’s like a percent, and then 10 years from now, it’ll be multiples.
Jake: You know how I reframe that a little bit for myself from when I’m trying to fight that counterfactual is, I look at it and I say, “Okay, I deserved to make the return that I did, because that’s what I’m comfortable with as far as what I view as the risk and reward.” When it tips to the other direction and I sell and it keeps going up, I didn’t deserve those other gains. I wasn’t smart enough to figure them out, and that’s okay. I just have to know which part I’m comfortable in and be okay, and run my own race and not get too upset about it.
Tobias: I agree. Although I think it’s funny that even know Buffett– Buffett said quite a few times that buying Berkshire was a mistake, because Berkshire was a terrible business. And then they basically transformed it by buying See’s and National Indemnity and so on.
Jake: Yeah. So, throw off a fair amount of cash over that entire–
Tobias: But he did say, I think in last year’s note or this year’s note or something like that, he said, it was still like a 40% CAGR on the investment. If you just bought it and sold it back to Stanton. If you just sold back into the buyback, you’d have made 40% annualized. So, that have been pretty good. Good job there.
Jake: Yeah, he’s all right at this.
Tobias: You can live on that, [Jake laughs] if you can find them every year.
Jake: Yeah, that’s true.
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