Invested: The Rule #1 Investing Podcast

Warren Buffett says that the ideal investment is one that you can hold onto forever, growing your money for as long as you own it. However, Buffett and every other successful investor also knows that there are times when selling a stock is the best route. For example, Phil Town was a big fan of IBM and bought into the company in his earlier investing years. He researched IBM thoroughly, and felt that he understood the business as if it were his own. A few years later, IBM got a new CEO named Ginni Rometty. Phil believed that she was trying to change the direction of the company, and she did not have a proven track record of success in the technology field. This was a big red flag to Phil. It was clear that IBM wasn’t making the transition to a new CEO smoothly, so Phil tried to offset IBM’s drops in the market by buying in on put options and selling on call options. This did not generate returns like he hoped it would.  Interestingly enough, while all of this was happening, IBM sustained a big Moat—which