As of the end of 2023, I had held the companies in my portfolio for 10 to 24 years with an average holding time of about 14 years. So, like Warren, my favorite holding time is forever.

 

The only reason I ever consider selling one of the companies I own is if I suspect that the long term financial future of the company is in jeopardy. If am convinced that the long term financial future is deteriorating, such that the dividend payments may be cut or discontinued, I sell the shares, as quickly as possible, with little regard for the price. If it means that I incur a significant capital loss, so be it.  In my opinion, some short term pain is better that a long drawn out period of agony, doubt and soul searching. 

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Fortunately, there are some warning signs that often appear long before the dividend is cut or suspended and these should be investigated when you periodically review the financial prospects of your holdings: 

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• Earnings, cash flow or revenues have been steadily decreasing for several consecutive years. 

• The payout ratio (dividend / earnings), cash flow ratio (dividend / cash flow) have been increasing for several consecutive years.

• There is reason to suspect dishonesty or financial fraud within the company.

• Company revenues, cash flows, earnings, are unexpectedly restated and reduced, or horror of horrors, management announces a potential future dividend cut. ​​