Nice summary. Still a lot of nuanced knowledge required to recognise temporary headwinds vs change in long term business fundamentals. I have found that overvalued companies can stay that way for sometime. Sometimes, they grow into the valuation, so I don’t want to sell just because it’s at or over fair value. Recently trialing use of some medium term technical analysis trend change indicators to provide some “ rules” around when to sell a great, but overvalued company so I can rotate capital into a better opportunity. Keep these companies on a watch list to consider re-purchase if they become very undervalued again.
Great piece! I always make it a point to write a 'post-mortem' analysis and establish a clear valuation for selling when I enter a position. This practice helps me stay honest with myself, especially if the situation deteriorates. I've also learned the importance of exiting early and reassessing my strategy rather than waiting for things to improve blindly.
For me, it is very simple. At any given point you should calculate your expected value for the stock and sell it if it drops your expected/average rate. People keep saying let your winners grow but they can turn around if they already appreciated too much. A simple question is would you buy this stock if you haven't own it. If the answer is no it is time to sell.
Nice summary. Still a lot of nuanced knowledge required to recognise temporary headwinds vs change in long term business fundamentals. I have found that overvalued companies can stay that way for sometime. Sometimes, they grow into the valuation, so I don’t want to sell just because it’s at or over fair value. Recently trialing use of some medium term technical analysis trend change indicators to provide some “ rules” around when to sell a great, but overvalued company so I can rotate capital into a better opportunity. Keep these companies on a watch list to consider re-purchase if they become very undervalued again.
Thanks Siew!
Great piece! I always make it a point to write a 'post-mortem' analysis and establish a clear valuation for selling when I enter a position. This practice helps me stay honest with myself, especially if the situation deteriorates. I've also learned the importance of exiting early and reassessing my strategy rather than waiting for things to improve blindly.
Thanks Greg!
Good approach, Greg.
For me, it is very simple. At any given point you should calculate your expected value for the stock and sell it if it drops your expected/average rate. People keep saying let your winners grow but they can turn around if they already appreciated too much. A simple question is would you buy this stock if you haven't own it. If the answer is no it is time to sell.
Great topic -especially nowadays.