Friday, Feb 5th 2021

How to exit early


This week, our team took to Twitter to address your biggest outstanding questions coming out of the extraordinary market events we've witnessed these past two weeks.

Within our takeaways, we flagged one important concept known as "holding period acceleration."

As you may know, we here at Titan are long-term investors at heart.  Every time we make a new investment, our goal is to hold it for many, many years.

However, this is not always the case.  Companies are not static entities, and sometimes things happen that change our assessment of a business's long-term prospects.

Other times, the market's valuation of the companies we own may simply run past our own best-case projections.

This is what we internally call "holding period acceleration," and is exactly what happened this past week with Opportunities holding Appian (APPN).

While most investors were focused on the drama that was occurring in a handful of stocks, we saw Appian quietly surging to record highs behind the scenes, driven by its modestly elevated level of short interest.

When added to its recent run over the past few months, the stock soared past ~400% of our entry price just a few months prior.

Because of this, we took the opportunity that was presented by the markets to exit that position well before we had anticipated doing so.

We still believe Appian is a great business and would have loved to hold onto it for longer, but as fundamentals-driven investors, we measure everything against our own internal forecasts.

For investors, the takeaway here is simple.  Focus on the long-term, but remain flexible enough so that you can capitalize on the rare, extraordinary opportunities the market will occasionally offer from time to time.

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