Last week, investor Bill Ackman hosted a fireside chat conversation in Omaha in front of a standing room only crowd of 500+ investors.

Ackman was joined onstage by Ryan Israel, his partner and Chief Investment Officer.

During the conversation, an audience member asked Israel a deceptively simple question:

"How do you know when to sell a stock?"

In a sharp, thoughtful reply, he outlined three reasons you sell:

1. You were wrong about the investment. New information or evidence fundamentally refutes the original investment thesis.
2. You've already been paid too well for what's left. Price and value are significantly dislocated in your favor, effectively pulling forward future growth expectations into the present. You've already "been paid" beyond any reasonable projections of the future.
3. The opportunity cost of holding is too high. The future compounding of the investment under a reasonable set of assumptions is inferior to other opportunities available to you.

Reflecting on the response, it hit me:

These aren't just reasons to sell a stock. These are reasons to "sell" anything in life: Jobs, relationships, pursuits, projects, or even identities.

I found myself exploring how each reason applies more broadly...

1. You were wrong about the investment.

Sometimes, you were wrong from the start. Sometimes, you were right at first, but new information means the original logic no longer holds.

Either way, the ability to recognize this is an absolute necessity—and easier said than done when emotions are involved.

The one who can separate emotions from decision making is the one who will eventually win.

2. You've already been paid too well for what's left.

Far too many people stay in something—a job, a relationship, a pursuit—long after it's delivered its value, particularly when that value came much faster than expected.

The human mind is notoriously bad at recognizing good fortune. You create a new expectation that the good times experienced to date will continue to roll.

More often than not, what follows is a simple regression to the mean—a return to the true long-term trend—which creates a negative reset for the individual experiencing it.

3. The opportunity cost of holding is too high.

Every time you say YES to staying on a given path, you are implicitly saying NO to the range of alternatives.

The opportunity cost of the present path is the value of the next best alternative.

There will be times when that opportunity cost is too high to ignore, whether in the form of traditional financial value, fulfillment, joy, or otherwise.

The Highest Return on Life

Here's the truth: Your life is a portfolio.

Of pursuits. Of relationships. Of dreams. Of identities. Of paths.

Every investor gets asked when to buy, but it's even more important to know when to sell.

Not out of fear of struggle or pain, but out of methodical, logical discipline.

Out of a commitment.

A commitment to achieve the highest Return on Life.

So, what are you selling today?

P.S. I had the opportunity to spend a few hours with Bill Ackman after his event. His support and endorsement for my book was the single most impactful inflection point in its trajectory. He said, "I like asymmetric investments and I don’t know of a better return than ​this book​. Read it. You will thank me and Sahil."

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