Hold Don't Sell Philosophy

Andrew Wilkinson shares his perspective on holding vs selling businesses, emphasizing that predicting business outcomes is challenging and holding long-term often yields better results than selling.

Key Points:

• Philosophy on Selling:

  • Doesn't like selling businesses
  • Hard to predict how large a business can become
  • Difficult to forecast how quickly a dying business will decline

• Business Lifecycle Observations:

  • Even dying businesses rarely collapse quickly
  • Usually better to hold forever than sell for 1x profit
  • Most businesses take longer to die than investors expect

• Selling Exceptions:

  • Only sells when founders specifically want an exit
  • Example: Sold MeLime because the founder wanted to exit
  • Albertsons bought it for "tens of millions" and worked well for everyone

• Value Creation Over Time:

  • Hard to predict which businesses will become large
  • Even declining businesses can generate significant profits before dying
  • When business is declining, selling price is usually too low to justify exit

• Real World Example:

  • References Warren Buffett selling newspapers
  • Buffett's sale was driven by:
    • Clear writing on the wall for industry
    • Complex union situations
    • Desire to exit operational complexity

• Investment Philosophy:

  • Prefers to maintain ownership
  • Values long-term holding potential
  • Focuses on total value creation over exit opportunities