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Learning to Invest / Portfolio Management
|Subject: Re: When do I sell stocks ?||Date: 3/28/2012 10:23 AM|
|Author: cabincruser||Number: 6643 of 6705|
It kinda matters Why you bought the stock in the first place ;^)
In P. Money Lynch's
One Up On Wall Street
In Chapter 17...The Best Time To Buy and Sell
When to sell
He reminds us that he doesn't "..pay to much attention to the science of wiggles (technical anaysis)."
And admonishes us to avoid 'premature exit'....basically, don't sell a tenbagger when it's just a measly little ole' fivebagger. ( A fivefold gain on $10,000 is $50,000 and the next 5 fold is $250,000.)
Avoid "premature exit".
Also avoid the drumbeat effect....a particularly ominous message is repeated over and over untill it's impossible to get away from it.
Every single dumb idea you hear about a stock or portfolio gets stuck in your brain.
When to Really sell
If you know why you bought a stock in the first place, you'll automatically have a better idea of when to say goodbye to it.
So write it down !! Start an Investing Notebook , today .
-For Slow Growers he doesn't "own many" though he sells when the fundamentals have deteriorated, no new products, little R&D, diworsification.
-For Stalwarts he rotates, replacing when the price gets above the earnings line or the p/e strays too far from it's norm.
-For Cyclicals he sells at the end of the cycle (anyones guess?) or when something has actually started to go wrong.
-For a Fast Grower the trick is not to loose the potential tenbagger.
The main thing to watch for is the end of the second phase of rapid growth as explained earlier (chapter).
- For a turnaround it is when everyone knows all the trouble is over, debt has declined, inventories are rising , and/or the p/e is inflated relative to earnings prospects.
-For an Asset Play he offers examples to wait for the raider, a takeover, bidding war, and /or a leveraged buyout.
valuation , valuation , eh.
When stocks are attractive, you buy them. Sure, they can go lower. I've bought stocks at $12 that went to $2, but then they later went to $30. You just don't know when you can find the bottom.
Fool on , sir cabincruser
who in the past has experienced 'premature exit' and now says Viva Motley Fool!
Ensure that you are healthy enough to engage in investing opportunities and watch out for Foolishness as it may cause a sudden drop ... or rise ... in blood pressure.
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