Never Sell A Great Business

Revisiting Two Of Our Biggest Mistakes

This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.

Today – taking a break from our normal publishing schedule – we are continuing our “12 Days Of Christmas” series.

Better than six geese a-layin’ and seven swans a-swimming, Porter & Co.’s version of the “12 Days Of Christmas” brings you something actually useful: hard-earned investment lessons to guide you through 2026. For the remainder of the year – in place of our regular research and insights – we will dish out key lessons from 2025… some earned from pain and others from gain.

Over the past year, editors across all of our publications have recommended stocks, bonds, or other trades that have resulted in a mix of outsized performances and humbling underachievements. Having begun on Tuesday, December 23, and extending through January 2, we will reveal a pivotal lesson – about why a stock soared to double-digit returns, or why one languished. We will also explore the ones that got away – that we sold too soon or that we didn’t recommend at all. 

Today, we take some lessons from two mistakes we made in our Complete Investor publication – either selling a great business too soon, or not buying it soon enough. 

Many investors believe the biggest mistake you can make is buying a stock that performs poorly… It’s not.

Not buying a stock that performs magnificently is an even bigger mistake.

Buying a loser – while regretful and money-losing – is not as bad a use of capital as the mistakes you can make by selling great businesses too soon – or not buying them to begin with – because you got spooked following a lousy quarter or we were worried about macroeconomic factors like interest rates. 

Our flagship publication Porter Stansberry’s Complete Investor (formerly The Big Secret On Wall Street) generally recommends only great businesses. As a result, virtually every time we’ve sold – or waited to buy – it has been a mistake.

In this issue we highlight two notable mistakes we’ve made, and show you the investment returns we missed out on by being too conservative when buying and holding great companies. 

Two Big Homebuilder Mistakes

In the July 1, 2022, issue of The Big Secret On Wall Street, we highlighted the remarkable business model of homebuilder NVR (NVR).

Most homebuilders are poor long-term investments. That’s because they’re terribly capital inefficient businesses – they require enormous amounts of capital to operate.

They take on debt to buy up big plots of land in areas where they think they’ll be able to build and sell houses. And to be fair, when they buy the right properties, in the right places, at the right price, they can make a lot of money. That’s why most homebuilders like to tout the size and quality of their land holdings.

However, over time, these companies inevitably end up owning too much land, in the wrong places, purchased at the wrong price. When the economy hits a rough patch, these companies struggle as the value of their land holdings fall relative to their high debt loads.