Successfully Trading In and Out of Positions Becoming the Devil’s Advocate

Buy More or Get Out

We don’t have many rules, but when a stock is down materially relative to its peer group we assign another analyst to formally review it and then force ourselves to buy more or get out. Not surprisingly, the analyst who originally recommended the stock is the last person to want to sell it. We do something similar on the upside: when a stock gets within 10% of our estimate of fair value, a new analyst will review it and we’ll make a formal decision what to do with the position.