BUYING AND SELLING

We try to fight against statements like “this would be a great investment if it were 10% cheaper.” That’s a wussy conclusion because you can’t be wrong: If it goes down, you can say you knew it was too expensive. If it goes up, you can say you knew it was a great investment. But if you know it’s a great investment you should buy it.

Christopher Davis, 5.31.07

“如果它再便宜10%就是一个非常好的投资”，对于这样的话，我们心怀反感。这是一种感无骨气的结论，因为你不可能错；如果它下跌了，你就会变你知道它不便宜；如果它上涨了，你就会说你知道这是一个好投资。但如果你知道这是一个好的投资机会你应该买入。

（夕饮冰：这句话突然让我想起我曹仁超！）

 

I expect to hold investments for three to five years, so the buy decision to me is clearly more important than the sell decision. More poor investment returns are made by paying too much for a stock than by selling at the wrong time.

Mark Sellers, 6.19.05

我希望我的投资可以持有3-5年，所以买入的结论对我来说比卖出更重要。很多坏的投资是因为买入价格太高，而不是在错误的时间卖出。

 

Sir John Templeton had one of the best methods for keeping emotion out of the process. He used to do his calculations of intrinsic value when there wasn't a lot going on in the market. He'd then place a margin of safety on those intrinsic values and place buy orders with his broker at, say, 40% below the current market price. I'm sure a fair amount of those orders never got filled, but if there was an enormous dislocation in the market or in an individual stock, the order would fill. Psychologically, that kind of pre-commitment is a very powerful tool to help us in periods of emotional turmoil. If you look at something when it's just gone down 40%, you're probably not going to want to touch it because it just warned on earnings or something similar.

James Montier, 10.31.08

坦普顿爵士有一个很好的摒弃情绪影响的方法。他通常在市场变动不大的时候计算内在价值。然后他为这些内在价值设置一个安全边际，再向他的经纪人下买入指令，比如说，低于市场价格的40%。我相信，会有相当数量的指令不会成交，但如果市场中有一个巨大的断层或者在某个个股中，指令可能会成交。从心理上让，这种预先委托是一种非常有效的工具来帮助你控制情绪的起伏。如果你看到什么东西下跌了40%，你可能就不想再碰它了，因为它可能警示一些净利润出现了问题或类似的问题。

 

I’m a value guy at heart, so would rather buy early than late. The problem with being late is that you’re already paying for the turnaround itself, so you have to count much more on the turnaround resulting in sustained revenue and profit growth.

Kevin O’Boyle, 11.21.07

我是一个发自内心的价值投资者，因此宁愿早买而不是晚买。

 

I have no idea where the bottom is. If I did I wouldn't be invested at all today and would then be fully invested when the bottom came. The alternative for me is to say that each time the market drops and throws up some of these bargain basement ideas, I'll deploy some capital as long as I have some capital left. It's not a fool-proof or  painless strategy – Ben Graham used a variant on it and nearly got wiped out during the Great Depression – but it's one that acknowledges that we cannot know the future with any degree of certainty.

James Montier, 10.31.08

我对底部没有概念。如果我知道哪是底我今天就根本不会投资，然后等到底来时全部投入。对我来说可选择的办法是，每次市场下跌到低价区的时候，我就会利用我能用的资金来买入。这不是一种简单且无痛苦的战略——格雷厄姆曾用过一个变量，在大萧条时他几乎被打光——对当我们不知道未来的确定性水平时，它是有效的。

 

Many value investors will buy the cheap company when there’s just a turnaround story attached to it, but we patiently wait for the fundamentals to improve first. The philosophy works because investors underreact to both positive and negative changes in fundamentals. If we see all the ingredients of a sustainable turnaround, we’ll buy after one quarter of good earnings, allowing our clients to benefit from the slow rebuilding of confidence that will be reflected in the stock price over time.

Kevin McCreesh, 10.31.07

许多价值投资者在一只股票有反转的传闻时会买入这只便宜的股票，但我们会耐心等到其基本面的改善。因为投资者对基本而的正面和负面的变化反应不足时这种方法会有效。如果我们看到了持续好转的所有因素，我们会在盈利好转的那个季度以后买入，这会让我们的客户从慢慢的建立的自信中受益，随着时间这会反映在股票价格中。

 

Given the way we invest, we will fall into value traps from time to time. In general, we try to constantly remind ourselves that when an industry goes south, things often

get worse than you expect and stay bad longer – there's usually plenty of time to find the bottom.

John Dorfman, 10.31.08

考虑到我们投资的方式，我们有时会落入价值陷阱。总体来讲，我们不停地提醒我们自己，当一个行业走下坡路时，事态往往比我们想像得更坏而且时间会更长——通常有足够多的时间来寻底。

 

We like to live with smaller investments in a company for three to six months before

making a full commitment. It gives us an opportunity to even better understand the

company and its business while getting to know management and whether we’re all

on the same page.

Jeffrey Ubben, 1.31.06

在我们大量买入前，我们通常小量买入一家公司，持有3-6个月。这可以给我们时间来更好地理解此公司和它的业务，以及公司管理者的情况。。。

 

We’ll probably take “R&D” positions in stocks [before completely finishing our research]. Action adds a sense of urgency to the work – there are so many things to

look at in this business that things can fall through the cracks unless you force yourself to focus. Having capital on the books does that.

Ricky Sandler, 8.25.06

我们可能会介入一些“研发”仓位（在我们研究完成之前）。这样会对工作起一个促进作用——在企业中有那么多的事情需要看，如果不逼着自己集中力量，事情可能就会化为泡影。介入的资金会起到这种作用。

 

We don’t generally buy full positions on day one – we’ll buy a half position, watch it trade, live through a quarter or two of earnings announcements and conference calls, and then decide whether to buy more.

Vance Brown, 10.31.07

我们通常不会在一天买入全部仓位——我们会买入半仓，看着它的交易，经过一季度或者两个季度的盈利公告和电话会议，然后决定是否买入更多。

 

I believe the biggest way you add value as a value investor is how you behave in those down-25% situations. Sometimes you should buy more, sometimes you

should get out, and sometimes you should stay put. I’ve never actually looked, but we probably hold tight 40% of the time, and split 50/50 between buying more and getting out. Making the right decisions at these moments adds more value, in my opinion, than the initial buy decision.

Richard Pzena, 2.22.05

我相信作为价值投资者，你增加价值的最大方式是看你在股票下跌了25%的情形下如何行动。有时你会买入更多，有时你会卖出，有时你会持有不动。我们没做过具体的统计，可能40%的时间我们会紧抓不放，其它60%一半时间会买，一半时间会卖。在这些情形下做正确的决定会增加更多的价值，让我来看，这比最初买入的决定都重要。

 

My threshold for pain is high as long as I believe I’m still right. Historically, we’ve

made a lot more money on the long side when what we thought we were buying cheap went down another 30% before finally going up – we always buy more if our thesis hasn’t changed.

Francois Parenteau, 7.31.08

只要我相信我还是正确的，我的痛阈比较高，在过去，当我们很便宜地买入后，有时在股份最终上升前会再跌30%，但我们却赚了很多的钱——如果我们投资的前提没变，下跌时我们会更多地买入。

 

I don’t believe everything is either a buy or a sell – some things are worth holding to stay connected to the company and learn more about it. We’ll also make small investments for the same reason.

Spencer Davidson, 6.30.08

 

There are no “holds.” Every day you're either willing to buy more at the current price or, if you aren't, you should redeploy the capital to something you believe does deserve incremental capital.

Lee Ainslie, 12.22.06

把握的事情是没有的。每天你会乐于在现价买入更多，或者，如果你不这样做，你应该重新部署资金于那些你认为值得投资的东西上面。

 

I more often than not sell too soon. To avoid that, I’m trying to better distinguish between cases in which the rise in the share price is still primarily a function of improving business fundamentals and those where multiple expansion has become most important. A rapidly increasing multiple often means too many people are starting to agree with me, which makes me nervous.

Aaron Edelheit, 1.31.08

我通常不会太快地卖出。为了避免这个，我会试着更好地对案例进行鉴别，股价的上涨是不是和企业正在改善的基本面相关，乘数的增加会变得最为重要。快速增长的乘数经常意味着有太多的人开始同意我的观点，这会让我不安。

 

I’ve concluded that leaving money on the table is a built-in problem for value investors. Our assumptions are generally so conservative that companies will blow through our target prices when they’re really firing on all cylinders. At least that’s how I rationalize it – it stills hurts when something I’ve sold takes off.

Alan Schram, 1.31.07

我的结论是，控制资本增长最大化是价值投资者固有的问题。我们的设想通常非常保守，以致公司的股价会在真的大幅上涨前的预热阶段就超过我们的目标价。至少我是那样解释——当我卖出的东西正式起飞了，令人很受伤。

 

To avoid selling too soon, we’ve forced ourselves to look over long periods at where margin and sentiment peaks have been in individual stocks, to really vet how high something might reasonably go.

Philip Tasho, 9.28.07

为了避免过早地卖出，我们逼着我们自己检查个股长期的利润和情绪峰值，然后对诊断股价到底能升多高。

 

We used to have a fairly rigid rule that as soon as something went above the market multiple we'd sell, but we thought we too often were leaving money on the table so we now use trailing stops. That means if something hits the market multiple on the day it's trading at $61, we'll set a stop to sell, say, at $59. If the stock goes up to $63, we'll set the trailing stop at $61, and so on. Hopefully this allows us to better take advantage of people's willingness to overpay for our shares.

John Dorfman, 10.31.08

我们过去常常相当严格地遵守规定，只要股价超过市场乘数，我们就会卖掉，但是我们认为我们放弃资本增长过于频繁，于是现在我们采用跟踪止损。这意思就是当股价达到市场乘数当天的交易价格是61, 我们设置止盈为59。如果股价涨到63，我们上移止盈价格为61，以此类推。这让我们更好地利用了人们愿意为我们的股票付高价的愿望。

 

We may be willing to hold until 110% of appraised value if management, through

its strategic decisions or capital allocation has a proven history of increasing intrinsic value beyond a natural rate. We actually talk more about management when we're looking to sell than when we're looking to buy.

Charles de Lardemelle, 11.26.08

我们可能会宁愿持有股票达到估定价值的110%，如果管理层的战略决策或者资金配置有过把内在价值的增加超过自然比率的经历。实际上，我们在卖出时会更多地提起管理层，而不是在买入的时候。

 

If we’re right on the long-term trends, our bias is to stay with a trade for many years to allow that to happen. We try to avoid getting itchy every time something hits a new high – a stock that goes up a lot over time, by definition, is frequently hitting new highs.

John Burbank, 8.31.08

如果我们正好在一个长期的趋势中，我们偏好把一个交易保留很多年。我们会避免在股价达到新高时心里发痒——一只股票会随着时间上涨很多，精确地讲，会不断地创出新高。

 

When management really makes us angry, we put the file in a drawer for a while and just don’t do anything. We try not to sell just because we’re angry. If you sell when you’re angry, you can imagine everybody else who sells that way reaches the point of exasperation at exactly the same time. That’s the kind of thing that creates at least a trading bottom. Better to sit on it for some time, and even if you still hate what the company’s doing, you’re probably going to get a better chance to get out.

David Einhorn, 3.23.05

当管理层真的惹怒了我们，我们会把文件扔进抽屉里放一会儿不做任何事情。我们不会仅仅因为发怒而卖掉。如果你因发怒卖掉了，你可以想象所有的其它人都与此同时愤怒到极点而卖出的场景。这时基本会造成一个交易的底部。最好是守着一段时间，即使你依然痛恨公司的所作所为，你将会可能找到一个更好的机会出场。

 

One lesson learned after enduring a few too many round trips is to take more of an IRR [internal rate of return] focus on when to sell – what is the return potential from today, not “I’m holding this until it reaches my target price of $X.” We’ll still ride things up and down, but it’s been less frequent since we starting thinking more in terms of today’s IRR. When we no longer believe something can make us 50% over the next two years, we start picking our spots to sell.

Robert Lietzow, 2.29.08

（对IRR不感兴趣）

 

One thing we’ve had to get better at over the years is sizing our positions to our conviction level. That may sound obvious, but the only bad year we’ve had was

in 2003, when a lot of our best-performing stocks went to historically high valuations

and we made the mistake of not taking profits.

Robert Williamson, 8.31.08

过去几年我们不得不做的一件事就是把仓位调整到我们的信心水平。这听上去很好理解，但在我们经历的仅有的一次坏年头2003, 当我们众多的股票表现极佳——达到了历史的高估值，我们却犯下了错误没有兑现这些利润。

 

If a company is doing well and continues to earn an attractive return on capital, I’m in no hurry to sell. We will sell when events materially threaten that return on capital, the discount rate implicit in the stock gets too low because the valuation has gone up, or if I just have a much better idea.

Murray Stahl, 11.21.07

如果一家公司运行良好，资本回报一直具有吸引力，我就不会着急卖掉。如果有严重的事件发生威胁到了资本回报，因为估值升高而导致贴现率太低，或者我刚好发现了一个更好的机会，我就会卖出股票。

 

We’ve been too quick at times to mediocre ones you buy for 50 cents on the dollar, and when they get to 90 cents you’d better start thinking about selling. But businesses that have strong moats that can be protected for a long time, in industries that are growing strongly, we make sure we give those businesses a chance to develop.

Sometimes you should let your truly great businesses run a bit.

Zeke Ashton, 2.22.05

 

If value keeps building in the business, that provides a cushion against round tripping

over time and we’re happy to be patient. We also think a slightly overpriced stock in the hands of skilled management can be used as a currency in making acquisitions and building a business, so we’re not entirely averse to holding something slightly vervalued.

Amit Wadhwaney, 5.22.05

 

The argument that losers in your portfolio will outperform in the future doesn’t

generally hold up to close scrutiny. After analyzing the trading records of 10,000

discount-brokerage accounts, Terrance Odean, now of the University of California, Berkeley, concluded that “Investors who sell winners and hold losers because they expect the losers to outperform the winners in the future are, on average, mistaken.”

VII, 4.27.05

 

We do make a clear distinction when selling between “compounders” and cigarbutt

stocks. Once the cigar butts come back, you know to get out because they’re just going to go down again. With something like Johnson & Johnson, though, you make a judgment call when it hits intrinsic value, based on your confidence in its ability to compound returns and what your alternatives are.

Christopher Browne, 9.29.06

 

[SAC Capital’s] Steve Cohen thought it was the silliest thing in the world to try to capture the first and last part of a stock’s move – those were the most dangerous

parts of investing. For me, I’d like to capture more of the early part of the move and leave the latter part for somebody else.

Robert Jaffe, 12.22.06

 

We replace portfolio holdings later in their earnings cycle and at the high end of their valuation range with those that have the opposite characteristics. There’s not one absolute number against which all ideas are compared. This is the valueadded of fundamental research – using our judgment and experience to gauge where companies are in their valuation and earnings cycles.

Kevin McCreesh, 10.31.07

 

We are required as analysts to present five, six or seven key reasons to own a stock, and if any of those start to erode, that’s a warning sign that often leads us to sell. For example, we have tended in the past couple of years to overestimate the intrinsic-value growth in media companies. As we scale those estimates back – taking away a primary reason for our owning them – we should be selling.

Clyde McGregor, 4.30.08

 

We have three people in charge of the portfolio and we require unanimity on a stock in order to buy. It’s majority rules on selling. The fact is that it’s very hard to sell one of your ideas, especially when it’s working beautifully.

Christopher Grisanti, 10.31.07

我们有三个人负责组合，我们在买入一只股票时要求意见一致。而卖出时则少数服从多数。事实上，将你的点了卖出时是非常困难的，特别是它还在漂亮地运转时。

 

Sometimes tracking insider selling isn’t so helpful, but if you do see an insider aggressively selling when the stock is falling, run. There’s only one reason somebody does that, and it’s not because they’re bullish on the stock’s prospects. I couldn’t care less if you’re paying for a new swimming pool or your kids’ tuition – you’re selling and think your stock is overvalued, so why should I own it?

Aaron Edelheit, 1.31.08

 

People would disagree with me on this, but I don’t think you can sell based purely on your valuation analysis. The stock has to at least be at fair value, but I also look for the sentiment to be clearly positive. If it’s still negative, I may hold on to it even beyond my fair value.

Mark Sellers, 6.19.05

大家可能不会同意我的说法，我不认为你会纯基于估值分析而卖出。这只股票必须至少达到公允价值，但我也寻找清楚的正面情绪。如果它还是负面的，我可能持有到它超过公允价值。

 

We have for selling what we call the “IBD test.” When our companies start showing

up on Investor’s Business Daily’s hot top-10 lists, that’s generally the time for us to

get out. When the momentum investor’s bible brands one of our companies as a hot growth company, we’re usually ready to sell. Sometimes it’s early, but we’ve gotten

in early as well.

David Nierenberg, 7.28.06

 

It’s when we’re truly negatively surprised that we typically exit a position. If we’re

surprised, that usually means management is also and that there’s something more fundamentally wrong with the business than we thought.

Steve Galbraith, 12.22.06

 

When a stock reaches the midpoint of the [valuation] ranking, from cheapest to most expensive, we sell automatically. As a stock price goes up and becomes less cheap, we’ll want to hold less and trim it back as it’s going up, and we’re out when it reaches the midpoint. I arrived at that discipline because otherwise I would have no idea how to sell. It struck me that if you let your emotions dictate when to sell, you risk falling in love with companies that have been doing well and you ride them too long, and  then something goes wrong. For me, having something systematic that says “this is

cheap” or “this is fairly valued” is really, really important.

Richard Pzena, 2.22.05

 

It’s a lot easier to know when to buy something than when to sell it. In general, when the upside/downside ratio from the current price gets to parity and we see no reason to change our targets, we’ll start selling.

Philip Tasho, 9.28.07

知道什么时候买入比什么时候卖出会更容易一些。

 

I’ve never understood why value investors who are very disciplined on the buy side

become momentum investors when they sell, saying they’ll wait for the market to

tell them when it’s the right time to sell. It seems to me that if you think your portfolio

is being hurt by that last move from fair value to overvalued – that that move is greater than what you’d get by going from 60% of fair value to 90% of fair value in

something else – then shouldn’t your strategy be to identify names that you’ve

missed that have run up to fair value and buy them for the run to overvalued?

Bill Nygren, 7.28.06

 

In general, we’re not in the business of holding securities that are fully priced. If

in our judgment the company’s valuation is appropriate for its growth prospects,

we should be selling and buying things that are bargains.

Francois Parenteau, 7.31.08

通常，我们持有完全定价的证券。如果我们判断某公司的估值已经符合了它的成长前景，我们应该会卖掉，然后买入折价的股票。

 

Value investors should completely exit a security by the time it reaches full value;

owning overvalued securities is the realm of speculators.

Seth Klarman, 9.30.08

价值投资者应该在股价达到完全估值时出场，持有高估的股票就进入了投机的区域。