ALZR11 Narrative Investing

KNOWING WHEN TO BUY THIS STOCK:

a. Do I have a well-thought-out narrative around this stock?

• Yes

b. Do I have conviction in my narrative around this stock?

• Yes

c. Is the stock trading at a decent discount to my estimated fair value?

• No

KNOWING WHEN TO SELL THIS STOCK:

a. Has my narrative around this stock changed for the worse since I originally bought it?

b. Do I no longer have conviction in a narrative around this stock?

c. Is the stock overvalued against my estimate of fair value?

Interpretation:

If you answer “Yes” to all three, that’s a relatively strong signal that it’s probably time to sell the stock.

If you only answer “Yes” to the third question, that’s potentially a signal that you should sell given your holding that stock at a price that you think is above its fair value.

If you only answered “Yes” to the second question, that’s potentially a sign that you should reduce your exposure to this holding, simply because you have less conviction in it, so it’s not a “confident bet” within your portfolio of bets.