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When Do You Sell A Stock?

+8
sas
apollo4891
prasadrmb
bakapandithaya
Trillionaire
Kumar
Kithsiri
SRIAS
12 posters

Go down  Message [Page 1 of 1]

1When Do You Sell A Stock? Empty When Do You Sell A Stock? Tue Dec 27, 2011 3:45 pm

SRIAS


Manager - Equity Analytics
Manager - Equity Analytics

The best investors are divided when it comes to this question. At one end of the spectrum you have the Warren Buffett camp that says, "Our favorite holding period is forever." At the other end, you had Peter Lynch who held on to most of the stocks in his portfolio for a month or two at the most. His entire list turned over at least once a year. And, he had around 1400 holdings!

It's important to note here that these are big players with billions of dollars in investments. Different rules apply there.

Your decision to sell a stock should be based on the strategy you're using. Since we use Fundamental Analysis, here are our reasons to sell stock:

• When the price of a stock crosses its intrinsic value — the stock is now getting overvalued and with
that comes the risk of a sudden drop in price. Time to lock in your profit and exit.

• You realize you made a mistake in your analysis — it happens every once in a while. You find something you don't like about the company or its management. Had you known that before you invested, you would have never bought the stock. If the reasons you bought the stock are no longer valid, it's best to sell. Remove the emotion out of the decision, admit you made a mistake, and sell. You will be better off.

• The fundamentals have deteriorated — the strong past financial performance of the company have now started going south. Evaluate the situation. If it doesn't look like the company will come out of the decline anytime soon, it may be time to sell.

• A better opportunity comes along — you find another company to invest in with great financials and a very attractive price. One small problem .... you don't have enough cash to buy a meaningful amount of stock. Can you sell one or more of the stocks you own that will free up some cash?

The buy and hold strategy does not mean owning a stock indefinitely. Believe it or not, selling a stock is much harder than buying a stock. You tend to get emotionally attached to the stock. It's hard to sell when the price has fallen steeply — you're always hoping that somehow the price will come back up again and you won't loose your money. It's hard to sell when the price rises — you don't want to get in the way of a good thing.

So again, let your stock investing strategy dictate when you should sell. Try and not let emotion get in the way. Remember ... you want to own the stock as long as you don't have a good enough reason to sell it. But if you do have a reason, sell it. Get it over with. Move on.


Main Source:- http://www.independent-stock-investing.com

2When Do You Sell A Stock? Empty Re: When Do You Sell A Stock? Tue Dec 27, 2011 3:56 pm

Kithsiri

Kithsiri
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

Good one.

I exited from one of my plantation sector shares when it did not pay dividends for two consecutive years and labour and management troubles were looming in the horizon.

Then the share plummeted and hit the (almost) bottom and it has not recovered yet from the fall.

I had some emotional attachment to it Embarassed being the first share I bought but never regretted letting it go since then.

3When Do You Sell A Stock? Empty Re: When Do You Sell A Stock? Tue Dec 27, 2011 4:56 pm

Kumar

Kumar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

Thanks for sharing a good one.
Keep it up.

4When Do You Sell A Stock? Empty Re: When Do You Sell A Stock? Tue Dec 27, 2011 6:47 pm

Trillionaire

Trillionaire
Manager - Equity Analytics
Manager - Equity Analytics

Thank you! I do agree with the fact that's it hard to sell than buying.

5When Do You Sell A Stock? Empty Re: When Do You Sell A Stock? Tue Dec 27, 2011 7:09 pm

bakapandithaya

bakapandithaya
Vice President - Equity Analytics
Vice President - Equity Analytics

Good 1 srias, thnkx 4 sharing

6When Do You Sell A Stock? Empty Re: When Do You Sell A Stock? Wed Dec 28, 2011 8:55 am

prasadrmb

prasadrmb
Manager - Equity Analytics
Manager - Equity Analytics

thanks for sharing

7When Do You Sell A Stock? Empty Re: When Do You Sell A Stock? Wed Dec 28, 2011 2:05 pm

apollo4891

apollo4891
Stock Trader

Thanks ..good one

8When Do You Sell A Stock? Empty Re: When Do You Sell A Stock? Thu Dec 29, 2011 8:28 am

sas

sas
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

SRIAS,
Thanks mate for sharing, I'm struggling with time to read these things, you too came under my radar. Keep it up !!! Smile

9When Do You Sell A Stock? Empty Re: When Do You Sell A Stock? Mon Jan 02, 2012 2:58 pm

greedy007


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Useful article SRIAS

Keep it up

10When Do You Sell A Stock? Empty Re: When Do You Sell A Stock? Tue Jan 03, 2012 12:04 am

kaka


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

good work siras

11When Do You Sell A Stock? Empty Re: When Do You Sell A Stock? Tue Jan 03, 2012 3:30 am

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics



Some veryh good point there in the article.

Thanks.

12When Do You Sell A Stock? Empty Re: When Do You Sell A Stock? Wed Jan 04, 2012 3:55 am

salinda88


Senior Equity Analytic
Senior Equity Analytic

yes it is a god one thank you, I learned a lot Smile

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