📖Bill Ackman
Sell Discipline Rules
Follow pre-defined sell criteria without emotion.
Have clear, pre-defined sell criteria. Sell when: your thesis is broken, valuation is fully realized, or a significantly better opportunity appears.
🏠 Everyday Analogy
📖 Core Interpretation
Bill Ackman advocates a repeatable process: define criteria, execute consistently, and review decisions against evidence. Process quality drives outcome consistency.
💎 Key Insight：Disciplined selling prevents emotional decision-making.
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❓ Why It Matters
Without process, there is no reliable feedback loop. Structured execution and review improve decision quality over time.
🎯 How to Practice
Run a decision loop of research, thesis, execution, and post-mortem; document assumptions and update playbooks with evidence, not hindsight bias.
⚠️ Common Pitfalls
Having opinions without execution criteria
Reviewing outcomes but not decisions
Abandoning rules during volatility spikes
📚 Case Studies
1
Warren Buffett Avoids the Dot-Com Bubble (1999)
In the late 1990s, Warren Buffett refused to invest in high-flying internet and tech stocks, insisting that he did not understand their business models or future cash flows. Instead, he continued buying simple, established businesses like Coca-Cola and American Express, whose earnings and customer behavior were highly predictable.
✨ Outcome：When the dot-com bubble burst in 2000–2002, many complex, hard-to-value tech firms collapsed, while Buffett’s holdings in simple, predictable consumer and financial franchises remained resilient and later compounded significantly. The episode reinforced that avoiding complex, opaque businesses can protect capital and allow steady compounding from straightforward cash-generating companies.
2
Peter Lynch’s Former Holding: Dunkin’ Donuts vs. Complex Financials (2008)
Peter Lynch, during his Fidelity Magellan tenure (1977–1990), favored easy-to-understand retailers and restaurant chains like Dunkin’ Donuts over complex financial institutions and exotic products. He focused on businesses where he could reasonably forecast unit growth, same-store sales, and margins, rather than opaque balance sheets and derivative exposures that later plagued banks before the 2008 crisis.
✨ Outcome：Dunkin’ Donuts (then Allied Domecq’s asset, later Dunkin’ Brands) exemplified a simple franchise model with recurring, predictable cash flows. In contrast, many complex financial firms with intricate structured products suffered catastrophic losses in 2008. The contrast highlighted that straightforward consumer businesses with transparent economics are often safer and more reliable long-term investments than complex enterprises vulnerable to analytical errors.
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