When to sell a stock

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27th Feb '19 by nemo

10 comments 2153 reads

Most if not all your website deals with stock selection to BUY but what do you have to say about when to sell a stock?

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Nemo

Premium Member

10 comments

Edward Croft

27th Feb '19

Hi there - I wouldn't say that anything on the website is about when or what to buy. We just highlight the factor exposures of each stock (i.e. is it cheap? is it quality etc?), and try to educate subscribers on the long run payoffs of owning stocks with those kind of traits. The colour codings reflect the odds of each stock given the long run payoffs of similar stocks on average.

It's very much a DYOR site... we are an education, data and tools provider for DIY investors. You should consider our offering as decision making props, rather than making decisions for you.

This may change in future - but I doubt we'll ever give buy/sell recommendations. In fact every time I've mentioned such a feature proposal - the community tends to be quite negative about the idea.

There are some articles on timing sells on the site:

- When to sell - technical perspective

-When to sell - fundamental perspective

Johnny2509

27th Feb '19

It all depends on what your strategy is. Are you trader or more of an investor - looking to hold a share indefinitely?

If you're the latter, you probably won't sell unless there is a clear fundamental change in the business you've invested in. This doesn't just have to be a detrimental change. The former will generally use technical analysis to look for selling opportunities to maximize short term gains.

I fall into the latter category, so do a fair bit of detailed research and number crunching before I look to buy into a business. Apart from the odd panic sell, I look to hold indefinitely.

AnonymousUser318975

27th Feb '19

Take 12 investors who bought into the same stock on the same week. Then ask them when they will be selling and you will get 12 different answers without doubt. Each individual will have their own price targets upon entry and you can bet your life none of them will be the same.

Additionally, some folks invest in a stock for years, others months, some weeks. Some of those will get concerned about daily movements, others will be watching weekly or monthly movements. Then add in news flow. Some folks might become more impressed by what they see as time passes, whilst others may become more disillusioned. Minds will and do change along the way.

It is also possible that folks will be selling for reasons that are not company specific. E.g to re-adjust a portfolio or because they need the capital for something else. At this time of year, it wouldn't be uncommon to see sells that are tax related. Crystallising a loss to reduce the tax bill for example.

I have always considered that selling (and buying) really comes down to your own personal desires, needs and requirements. But when I make a sell, I am aware that someone else must be buying them for the transaction to take place. So whilst I may have good reason(s) to exit my position, someone else has equally good reason(s) to open theirs. And vice versa.

And round and round it goes.

cig

27th Feb '19

You can buy green stockrank styles and sell when they turn red.

AnonymousUser605348

1st Mar '19

IMPO - if you bought something to collect the div... sell it after you get the div. If you buy it because it has a super low p/e... sell when it's p/e becomes middle of the pack. If you bought it because you think you'll get paid when it liquidates... wait for the stuff to hit the fan. If you think your money would be better used elsewhere... sell and reallocate.

What are your investment objectives??

"Our favorite holding period is forever." - Warren Buffet

William K

2nd Mar '19

"Our favorite holding period is forever." - Warren Buffet

But even Warren Buffett doesn't hold forever. He's just sold a $2.1 billion holding in Oracle and reduced his holding in Apple.

https://warriortradingnews.com...

donald pond

3rd Mar '19

Can I just give a plug to one of my favourite books ever, Stan Weinstein's Secrets for Profiting in Bull and Bear Markets. He was the Minervini of the 1980's (but he is much more humble that Minervini), and to be honest, after reading him I'm not sure MM has anything to add. Stan has a very good chapter on when to sell, and it essentially depends upon whether you are a trader or an investor, but in any event, you want to sell when the chart starts telling you that the uptrend is over. It really is as simple as that. But I really recommend the whole book.

HumourMe

3rd Mar '19

Can I just give a plug to one of my favourite books ever, Stan Weinstein's Secrets for Profiting in Bull and Bear Markets.

For those interested here is a review of Stan Weinsteins book. Also a favourite of mine. The drawback is the chart quality that reflects the times.

seismo101a

3rd Mar '19

Fully agree with donald ponds and HumourMe's recommendation on Stan Weinstein's book.

I've been re-reading it last week (must be the 3rd or 4th time I've read it). It really is a great book and very reasonably priced on Amazon (currently listed on Amazon for £13.41).

There are a couple of really good websites that are heavily based around Stan's Stage Analysis principles
https://stageanalysis.net/forum/index.php
https://www.nextbigtrade.com/stage-analysis/

gus 1065

4th Mar '19

Another vote for Mr Weinstein’s book. I’m no great technical analyst but found his book approachable and intuitively simple to follow and his work is the basis for much that follows from the likes of Minervini.

I attempted to put together a couple of stock screeners to identify stocks in Stage 2 (when to buy) and Stage 4 (when to sell) which proved to be quite tricky as his approach is very much based on price and volume action so lends itself better to a chart/picture rather than a simple algorithm. The Stage 2 screener in particular has quite a few variables in it such that I’ll often switch a few off (otherwise there are no qualifiers). I still use both as a check list when looking at an individual stock (whether to buy or sell) as a pointer for further focus.

https://www.stockopedia.com/screens/weinstein-stage-2-114677/

https://www.stockopedia.com/screens/weinstein-stage-4-116237/

Gus.

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Nemo

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