If you follow the fat-pitch method, you won't trade very often. Wide-moat companies selling at a discount are rare, so when you find one, you should pounce. Over the years, a wide-moat company will generate returns on capital higher than its cost of capital, creating value for shareholders. This shareholder value translates into a higher stock price over time.
If you sell after making a small profit, you might not get another chance to buy the stock, or a similar high-quality stock, for a long time. For this reason, it's irrational to quickly move in and out of wide-moat stocks and incur capital gains taxes and transaction costs. Your results, after taxes and trading expenses, likely won't be any better and may be worse. That's why many of the great long-term investors display low turnover in their portfolios. They've learned to let their winners run and to think like owners, not traders.
Circle of Competence and Sector Concentration >>