A few lessons on recent sales
I've learned to fear a few more things: China, persistent legal action, and poor capital allocation
I've been gradually been removing a number of substandard businesses from my portfolio. It's a challenging process, especially when you've held onto certain positions for an extended period. Commitment and consistency bias is a very tough thing to grapple with. Nevertheless, while I anticipate these companies to perform adequately, there are risks that I'm no longer willing to be exposed to. If there's one thing I've learned in the past five years, it's that the best investments are straightforward. Accounting for return-on-brain damage is an underrated input in this regard.
In the spirit of remembering the late Charlie Munger, I'll borrow another witty quote from the great man:
"I've come to fear three things: an architect, a contractor, and a hill."
In that same spirit, I've learned to fear three additional things: unfriendly capital markerts, persistent legal action, and poor capital allocation—or, I should say, I've learned to fear it even more than before.
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