Thanks for the link. I thought I had seen a thread on this at one point but couldn't find it for some reason. A few general comments.
1) I like the idea of having a fixed sell point ("intrinsic value") which you've both expressed. However, I have much difficulty with the concept of intrinsic value and relying on it in concrete terms. We can, of course, define intrinsic value in concrete terms (discounted future dividends, etc) but then how do we measure it and how well do our models actual arrive at intrinsic value?
Many different models exist which purport to calculate some sort of intrinsic value but none of them agree with eachother and it raises the question of how we might even test how well a model accurately measures intrinsic value. For these reasons I have issue with using intrinsic value as a sell criteria because it's not clear to me how to implement it.
This might be deserving of its own topic but here are my thoughts on "intrinsic value". I think the idea of intrinsic value is a useful paradigm and motivator for stock selection criteria. That paradigm suggests what things one might look at to find value. But then you need selection criteria. These criteria act as a sort of test which has the potential for both Type I and Type II error (here I have in mind the question: "is this stock undervalued?".) For me, I'm willing to use criteria that has a high Type II error provided that I can reduce, as far as possible, Type I error.
For example, consider the criteria of "purchasing stocks that sell for less than 2/3 NCAV". This has a high Type II error since it ignores all of the other undervalued stocks available. But historical evidence suggests that this screen is able to pick out undervalued stocks since. But it doesn't tell me a damned thing about what the intrinsic value of any of the stocks.
And unless there is some method to test models of intrinsic value, I see it as nothing more than a, perhaps, useful heuristic. All models of that sort will have Type II errors and there's no guarantee that the real intrinsic value of the issue is anywhere near what the model predicts. To me, this is fine provided that the model is still able to select underpriced stocks with relatively good accuracy even if the IV estimates themselves are wrong.
2) The thing I like about the "50% or 2 years" is that it has an exit strategy for the "value traps". This is something I don't like about Buffett's buy-and-hold strategy. There's no sense in holding on to a stock that isn't and, perhaps, won't ever go anywhere.
3) I agree with the idea of that selling in a week is/can be "reactionary" but it really depends on if you have criteria in place or not. Had the issue increased by 50% then I should have sold by Graham's criteria.
One option would be to look into TA. Although I suspect most of it is superstition, there have been studies that have shown its effectiveness (I've read an article that surveyed the literature so I couldn't tell you which strategies have any effect.) Obviously there are plenty of methodological issues that would have to be addressed before I would consider it. But the idea itself doesn't seem too far fetched to me (consider, for example, Robert Shiller's claim that there is a "price-feedback loop" which plays a role in determining human behavior in financial markets.)
4) Trailing stop – it's an interesting idea but I'd have to learn more about stop orders. In particular, I've read there can be issue with exchanges like NASDAQ. The "stop" might be triggered not by an actual sale but by a bid which could be quite low.
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