Can Losers in Your Portfolio Really Hold up in the Future? Capturing the Correct Part of a Stock’s Movement

Clear Distinctions between Compounders and Cigar Butt Stocks

We do make a clear distinction when selling between “compounders” and cigar butt 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.