In our last post, we highlighted John Templeton’s maximum pessimism philosophy as he described it to Forbes magazine in 1995. Much of Templeton’s investing approach has to do with finding bargain stocks. In the 1995 article, Templeton discusses when to sell investments:

Having beaten not just the market, but the markets, for so long, what advice does Templeton offer? He agrees with us that most investors are better buyers than sellers: They sell either too soon or too late.

“I spent many years on that problem myself,” [Templeton] replied. “Several years ago I came up with what I believe is the right answer of when to sell. The solution is never to ask when to sell a stock. Instead, you should sell a stock only when you have found a new stock that is a 50% better bargain than the one that you hold.” That’s a constant theme with Templeton. You might call it comparison shopping. It’s as much a search for relative bargains as it is a search for absolute bargains. Compare, compare, compare.