Don't Sell the Compounder
When you own a great business, don't sell it fully priced, don't sell it overpriced — only maybe when it's egregiously overpriced.
Very few businesses have enduring, sustaining moats. When you find yourself a partial owner of one, the default is to never sell. Most wealth (Walton, Berkshire) comes from a handful of concentrated holdings compounding for decades, not from trading. Selling is only on the table when the price is so egregious you cannot justify it any possible way.
- Enduring-moat businesses should essentially never be sold in capitalism.
- Concentrated holdings — not diversification — create generational wealth.
- Sell only at egregious overvaluation you can't justify by any means.
- You learn the business after you own it; patience is the edge.
Pabrai's funds owned 1% of Ferrari at a ~$10M cost base and sold; the stake would be ~50x today. He bought Goldman Sachs at $65 (half Buffett's ~$130-area entry) during the crisis and sold for a triple. Both are durable-moat businesses he says should never have been sold.
Pabrai's biggest stated mistake: selling 1% of Ferrari at a ~$10M cost base (now ~50x), and selling Goldman Sachs bought at $65/share for only a triple. Both, he says, should never have been sold. His Turkish holding (Reysas), up ~100x, he will hold "as long as we can."