Investment Sell Discipline

We at the ACI Partnership believe that the decision to sell is the most difficult task of the investment process, even more so than the buy side, therefore, our sell discipline is as follows:

The ACI Partnership believes that business values are dynamic in nature, and that both a company and businesses can continue to grow as long as they have a strong balance sheet and are well managed.   Therefore, the portfolio typically has a very low portfolio turnover and long holding periods which reduces cost and is tax advantaged.

Criteria to sell a position usually consists of a conversion activity such as mergers, acquisitions, spin-offs, restructurings, management buyouts, assets sales, and other activities.   However, the more typical catalyst for a voluntary sell from the portfolio in the open market would include factors, such as:

  • the company becomes grossly overvalued in the open market,
  • the company appreciates and becomes excessively overweighted in the portfolio,
  • the business conditions change for the company,
  • there has been an impairment to the intrinsic value of the company, or
  • our original analysis or idea was flawed.