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Infinite Fund's avatar

Good write up, thanks. Considering the biggest mistakes great investors have made in their careerers, and the asymmetry in missed returns from a great compounder vs a mistake, erring on the side of holding (when a company has optionality and a decade+ runway ahead) is my default.

I've also this year started labeling a few positions I hold as "permanent" positions (my highest conviction ones which I've held usually for a few years). Whilst this label can change if the competitive dynamic changes for them, having a few labelled like this helps with my decision making process of what to trim for a new opportunity, or to hold and not trim when these "permanent" holdings get expensive-looking.

Similar to the Mungar "never sell CostCo" or Mohnish with Raysas (unless the father/son team changes)

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A Simon's avatar

completely agree with this approach. Selling purely based on valuation misses the bigger picture—especially when owning companies with strong optionality that’s hard to quantify. Like he said, valuation multiples alone don’t tell the full story, and defining a “nosebleed” multiple isn’t straightforward.

I also appreciate the emphasis on clearly documenting the investment thesis and tracking how it evolves over time. This helps avoid “thesis creep” and keeps the process rational rather than emotional.

Most importantly, shifting the sell rule to underperformance versus a benchmark (rather than just a fixed percentage loss) makes a lot of sense. It helps avoid knee-jerk selling during market downturns while still cutting losses on truly underperforming positions.

Overall, this disciplined and flexible mindset balancing patience with pragmatic risk management

is exactly how I approach investing too.

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