No. of Recommendations: 7
I told him it’s easy to sell when things are high, but hard to jump back in IMO. Plus the capital gains tax problem. Instead of selling, I recommended he keep building up some cash so he can take advantage of any big dips in the price.
Thoughts? Is my bias leading him astray because I got lucky with Berkshire?
It sounds like pretty good advice in general.
Sure, I think there is always a price at which it really does make sense to sell out completely. But if you don't have a firm handle on the true value of something, it's danged hard to know where that price is. See Mr Buffett's comments about not selling Coke during its bubble, and saying later that really he should have sold.
Face it, most of us don't have a firm handle on the value of most of the things we own. A corollary is that trading a lot less is a good idea.
Jim
