Understanding How Capital Works

I’m going to start ramping up and expanding the frequency of posts for the Patreon subscription service (which you can access by clicking here) by moving to a mid-week and weekend posting schedule. For a while, I have been flummoxed on the best way to increase the amount of content I produce because I only make so many investment decisions per year.

To that end, I am going to add more financial investing philosophy articles, analyses of tempting decisions that should be avoided, and assessments of stock performances for companies that I already own.

In this spirit, I just published an article titled “Understanding How Capital Works” that criticizes the mantra that an investor cannot go broke taking a profit. For a specific example, I point out that investors in Ross Stores could have easily sold in 1989 after the stock tripled in the prior year but then missed out on the 19% annual compounding over the next thirty years.

There is a well-known stock today that is trading at over 30x earnings that I have encountered sensible long-term investors saying that thay are selling, and in response, I provide several reasons why I believe that will be a Ross-stores type of mistake. 

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