The first thing that caught my eye was Wesfarmers.

We were told to avoid wes even at $65.

I'm happy for them to get one right.

Totally agree @Goldfish. I also heard the Intelligent Investor discussion re never sell stocks. I believe CBA was mentioned also. Although CBA surprised to the upside yesterday and jumped 7%, it was most likely already overvalued. I still hold it but reduced significantly near the highs. I will be updating my valuation soon and watching the share price momentum.

In my mind there are two things to watch when a the share price starts to look expensive, your valuation based on likely future performance (number 1) and the chart. I start selling slowly when the share price exceeds my valuation. If the share price momentum is strong, I sell very slowly until the holding is a size I feel comfortable with for a good business which looks expensive. There is risk built into this scenario.

So for me it comes down to valuation and momentum. There is no such thing as a “Never Sell Stock” in my view.

On the buy side I work similarly but in reverse. I add very, very slowly below valuation if the momentum is negative (falling knife). There’s most likely more pain to come for the share price. As the share price starts to bottom out I add more. I probably should be waiting for a little kick up in the share price before significantly adding more based on my experience to date.

I used to ignore technicals but the phenomenon is real, has enormous influence on share price in either direction, way beyond any sensible valuations. I don’t think you can ignore the charts, and it is unhelpful hearing people talking about “Never Sell Stocks”. History tells us this is absolute nonsense.

@Goldfish i think i covered a lot of this with my talk with AP a few weeks ago, but from what you say (non exhaustive)

1. accountability, own your own decision, opinions are second-order confirmations
2. Information inflow, be careful who and what you pay attention to
3. if you are an active investor, stay active
4. Even great businesses become overvalued, my core holdings i have an idea what the intrinsic value range is, and do trade when it overshoots a lot at the extremes

Does it always work no.

Having said that, CSL has been particularly tricky. for a number of reasons, i was quite sceptical and sold down a lot a couple of years ago, due to the unusual acquisition, C suite changes, CSL112 failure and second order imapcts, blind belief by punters, but bought back in on the supposed strength of the core franchise, after the fall. now that's in trouble. so all the 50/50 calls have been crap. but as you point out, it was trading at unsustainable multiples, as almost all stocks do, PME's latest example.

ps as an aside, there has been this annoying guy on Seeking Alpha who kept posting how well Grifols was doing, i went out of my way to tell him how wrong he was, well it turns out.......

I have CSL bought well above the current price and like most am caught up on the CSL stock crash as well as the AI induced tech stock pummeling.  

  Goldfish it is interesting your showing the Intelligent Investor: “The Never Sell List” of 2019. And as you point out, you could be pretty sure this recommended list has underperformed over subsequent years.

The intelligent Investor in their never sell list was in many ways just repeating a prevailing view expressed by Buffett and many others at the time.

This is how humans behave and this also how AI behaves.  In many ways what we like to call human intelligence just amounts taking in (copying) what those around us say, even if we like to call it thinking and reasoning.  Though I could be wrong.