Stock picking – thoughts on finding winners and holding through growth

Have you ever found a winning stock early, but:

• Sold it too early?
• Sold it when its share price was falling?
• Sold it to hoping you could buy it back again cheaper but couldn’t?

Have you thought you found a winning stock, but it turned out to be a loser, and held it too long?

We have, and it still happens occasionally, but we’ve understood how best to find the gems and then hold them for compounding returns over the years.

One of our measures of investing success is if we’ve generated Alpha.

Alpha refers to excess returns earned on an investment above the benchmark return.

Fahd and I have spent over a decade making Alpha by individual stock picking. Picking winners and then, more importantly, holding them through sustained growth.

I have distilled some of our thoughts and ideas around stock picking to generate Alpha in this article.