A downward movement on the stock market is not a reason to sell a share. What matters is the underlying economics and quality of management. If those economics or management deteriorate then it might be a candidate for sale, but this is not because Mr Market has shoved the price down. Warren Buffett said a few days ago,
“If we hold stock XYZ, and we like the business, and the stock goes down 20, 30 or 40% we don’t feel we’re poorer.
We would feel we were poorer if [when something like] what happened to the airline business [occurs]. The world has changed for the airlines.
The virus will cost Berkshire money. It doesn’t cost it money because our stock moves around…But there are certain industries – the airline industry among others – that are really hurt by a forced shutdown.”
He sold, in April, all the airline shares held by Berkshire for $6bn, making a $1bn- $2bn loss on these four investments.
Tomorrow’s newsletter discusses the mindset needed for a successful investor.………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
Prof. Glen Arnold
I'm a full-time investor running my portfolio from peaceful Leicestershire countryside. I also happen to be UK´s best selling investment book author and a Financial Times Best selling author.
Originally, I wrote all my ideas out in full on this website. Now that ADVFN publish them they are entitled to display the full version for six months – you can see them here. Thus can I only post the first few paragraphs here for anything younger than six months.
I write 2 to 3 newsletters per week - investing is about making the right decisions, not many decisions.