When To Sell And When Not To?

This section deals with an in-depth discussion of when to sell. There are notes on when to sell a cyclical, when to sell banks and NBFCs, and when to hold stocks indefinitely.

 

This section is heavily influenced by the author’s own experiences of his stocks.

  • Look at Opportunity Cost as  money is limited.
  • Valuations that have been extended- If a company's market cap is low in comparison to the potential for growth, a high P/E ratio is irrelevant.
  • The bull sector is losing favor. - It is not necessary to buy at the bottom or sell at the top in order to make money. However, if a person is stuck in the fall, it is preferable to fall with the leader rather than with a laggard.
  • Changes to the original thesis - Changes in fundamentals, ineffective management, or government policy.
  • Business in general is slowing.
  • It is not advisable to look at the price of a stock after it has been sold because it may have an emotional impact on you.

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