My co-founder David Kuo has an investing rule that some of you may find to be peculiar.
He never sells any stock he buys — period.
There are no exceptions or escape clauses.
David didn’t sell when the pandemic spread across the world six years ago.
He didn’t sell when US President Donald Trump announced the “Liberation Day” tariffs last year.
And you can be sure that he isn’t selling as the stock market tumbled on Monday amid an oil price hike.
In simple terms, he buys, and he holds — that’s it and that’s all.
Before you dismiss this idea as reckless, consider what this commitment actually demands.
If you know you will never sell a stock, every purchase becomes a permanent decision.
You can’t afford to be casual.
You can’t buy on a whim and figure it out later.
In other words, the discipline doesn’t start at the point of buying.
It happens long before he buys a stock.
That is the part most investors miss.
The real work happens before you buy
When the stock market wobbles, investors spend too much time thinking about when to sell.
Should I take profits?
Should I cut my losses?
Should I sell now so that I can buy back later?
These questions consume investors.
Entire books have been written about timing your buys, and stop-loss techniques.
Yet, in my experience, the best investors rarely think about selling.
Instead, they pour their energy into the buying decision.
Think about it this way.
If you are choosing a partner for life, you would be incredibly selective.
You would take your time.
You would look beyond surface-level attraction and ask deeper questions about character, values, and long-term compatibility.
David treats his stock purchases the same way.
By removing the option to sell, he raises the bar for every stock that enters his portfolio.
The result is a collection of businesses he knows deeply and trusts completely.
It is not a strategy of laziness.
It’s a strategy of extraordinary care.
Why selling feels like the right thing to do
Here’s the uncomfortable truth: most selling decisions are driven by emotion, not analysis.
When a stock drops, fear kicks in.
When the headlines scream about high oil prices, recession, or tariffs, every fibre of your being tells you to “do something”.
Daniel Kahneman, the Nobel laureate and father of behavioural finance, would recognise this pattern.
In his parlance, your reflexive brain (called System 1), built for snap decisions and danger avoidance, often overwhelms our analytical (System 2) brain before you have a chance to think things through.
The stock market exploits this mismatch daily.
Every piece of breaking news, every red ticker on your screen, every pundit urging action — these are all triggers for System 1.
And System 1 has one default response: react.
Selling feels productive.
It feels like you are taking control.
But more often than not, you are simply giving in to the noise.
The cost of selling too soon
I know this from painful personal experience.
Back in January 2007, I bought shares of Netflix (NASDAQ: NFLX) at a split-adjusted US$0.33 per share.
Over the past two decades or so, the stock has soared, crashed, and soared again.
Here’s the kicker: along the way, I sold half my position.
At the time, it felt like the prudent thing to do.
Lock in the gains. Reduce risk. Be sensible.
But here’s what “sensible” cost me: I estimate that the shares I sold would have gained over 14,000 per cent had I held on.
Let that sink in.
It’s the equivalent of holding 140 stocks that went to zero.
And the chances of finding another Netflix are slim.
My remaining shares?
They are up over 300 times my original investment.
The half I kept is doing the heavy lifting.
The other half I sold became my most expensive lesson.
For David, his eyes are on the dividend stream his shares produce, not the stock price.
And if share prices decide to head south,
As the late Charlie Munger once said, the big money is not in the buying or selling but in the waiting.
He is right, of course, but knowing the discipline and living it are two very different things.
A default, not dogma
Now, I want to be clear.
You don’t have to adopt David’s rule as a rigid requirement.
There are legitimate reasons to sell.
A business may suffer permanent deterioration.
Your original thesis may be proven wrong.
Management may stray in ways that betray your trust.
But these situations are rarer than most investors think.
The financial media would have you believe that every earnings miss, every competitive threat, every macro headline is a reason to reconsider your position.
Here’s the truth: it’s not.
Most of the time, the right response to market noise is no response at all.
David’s approach is the extreme version of this principle.
But even if you don’t go as far as he does, adopting a “not-selling” mindset changes how you invest.
Setting it as a default mindset forces you to ask better questions before you buy.
It keeps you from reacting to every headline.
And it lets compounding — the most powerful force in investing — do its work undisturbed.
The math of patience
Consider the simple arithmetic.
A stock can only fall 100 per cent.
If that happens, you lose everything you put in — and that’s the worst case scenario.
But a stock can rise 1,000 per cent, 5,000 per cent, or in the case of my remaining Netflix shares, over 300,000 per cent.
The upside is theoretically unlimited.
The downside is capped.
Yet, every time you sell a winner, you cap your upside voluntarily.
You are choosing to limit the one side of the equation that works in your favour.
That’s why selling a winning stock too early is far more costly than holding a losing stock too long.
Sure, there will be losers.
No one’s perfect.
But here’s the key: the winners, left alone, will overwhelm the losers over time.
Get Smart: The art of doing nothing
The art of not selling isn’t really about not selling.
It’s about becoming the kind of investor who doesn’t need to react to every bit of news.
It’s about doing the hard work upfront — understanding the business so deeply that short-term noise doesn’t shake your conviction.
It’s about recognising that the urge to sell is usually your emotions talking, not your analysis.
David Kuo understood this from the start.
It took me a costly lesson with Netflix to learn the same thing.
You don’t have to commit to never selling.
But the next time you feel the itch to sell, pause and ask yourself: has anything changed about the business?
Or has something changed about my emotions?
If it’s the latter, the best move is no move at all.
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Disclosure: Chin Hui Leong owns shares of Netflix.
