Selling Big Winners (with Josh, Michael and Blair)

The Compound and Friends

Josh Brown

News, Business News, Business, Investing

4.7 • 2.2K Ratings

🗓️ 17 March 2019

⏱️ 8 minutes

🔗️ Recording | iTunes | RSS

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Summary

There you are, sitting on a massive gain in a big winning stock. And now it's become a large portion of your portfolio and your net worth increasingly depends upon that stock staying up. Now what? Diversification will rarely look as attractive in hindsight versus the huge gains that are possible from a big winning stock. And regret minimization is one of the most important strategies in finance given how our behavior affects our long term returns. In this episode of Live from the Compound, Certified Financial Planner Blair duQuesnay joins Michael Batnick and Josh Brown to discuss regret minimization techniques and how to rationalize selling a big winner. You can talk to Blair duQuesnay about your own portfolio and financial plan here: https://ritholtzwealth.com/team/blair-duquesnay/ Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Hey what's up it's Josh Brown we are live from the compound it's me it's Michael
0:04.0	it's Blair dukinay uh... blair you wanted to talk about
0:07.8	this idea and we see it everywhere
0:10.4	uh... where like
0:12.1	it's never been an easier decade to be a self-directed investor or if
0:17.3	you've owned the biggest winning stocks how do you down shift and say okay maybe
0:22.3	it's time to diversify.
0:23.7	Like you're having conversations with people all the time and they have a lot of Apple.
0:27.4	They have a lot of Google.
0:28.6	They really haven't had to do anything.
0:30.4	And that's like just propelled their portfolios to much bigger numbers.
0:34.0	So now what do you tell people that have had that level of success?
0:38.0	Yeah, so if we look at the S&P since the bottom of 2009,
0:42.0	it's been very difficult for any diversified strategy to beat
0:45.7	the S&P and do-it-yourself investors tend to buy the large-cap US stocks, you know the big
0:51.4	names specifically the names that they may do business with, the
0:54.8	consumer products that they buy.
0:56.7	And so this rally has been led not only by U.S. large-cap stocks, but also by the names of the companies that we interact with,
1:03.9	Apple, Amazon, Facebook, Google.
1:06.2	And so it's very, it's confirmation bias, right?
1:09.1	So for 10 years.
1:10.4	Oh, they say, I have an iPhone, I'm on Facebook, and I've tripled my money in both of those stocks.
	...

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