The art of selling stocks

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Contra
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The art of selling stocks

Postby Contra » Sun Jul 15, 2018 11:25 am

Successful stock investing requires both buying and selling stocks.

Why do many advices and concentrate on buying stocks only?

Philip Fisher wrote, "It is only occasionally that there is any reason for selling at all." That occasional reason is "the deterioration of a company's underlying business. “According to him, there were only two possible causes of a deteriorating condition: bad management or decreased prospects for a company's products.


When the business is no longer great and it's time to sell the stock. How about if we see coming strong turnaround?


Still there is some selling for some stocks in the market. It could be due to so many reasons such as fear, cutting losses, losing faith on the market, settlement of credit or margin and rebalancing portfolio etc.

Traders or investors could make some terrible mistakes here.

They sell winners and keep losers
They sell low and buy high later

In my view just like buying stocks, selling stocks are also equally important. Execution of selling stocks without a plan could lead to poor results.
In a trading or investment plan there should be selling plan before buying any stock.

Are we going to keep as long term investment without selling?
Are we going to buy it for mid tem investment?
Are we having some targets?
Are we selling stocks before the margin or credit call?
Most investors or traders sell stocks thinking price has gone up it’s time to take profits, or
The price has gone down so it's time to cut losses.
Traders like to sell stocks when they meet the stop-loss order as well. But selling good business could miss mid and long term gain.
Selling and reducing current holdings for diversification
Sell stocks because they need money

In short, selling stocks is not as easy as buying stocks.

Mastering the art of selling stocks also could minimize risks involved in stock markets.
Company, stock market, politics and the economy are four different things.

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Contra
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Re: The art of selling stocks

Postby Contra » Sun Jul 15, 2018 11:33 am

Company, stock market, politics and the economy are four different things.

solace
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Re: The art of selling stocks

Postby solace » Mon Jul 16, 2018 7:25 am

Thanks Contra.
With time and experience now I realise that infact selling is more important than buying.

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Re: The art of selling stocks

Postby Contra » Mon Jul 16, 2018 12:29 pm

Some stocks should have sold before they de- listed as a result of bankruptcy and before their share prices fell massively as a result of bad management, very poor fundamentals and unforeseen circumstances.

Some stocks especially quality strong multibaggers should have kept for more than 20 years without selling. We lost long term shareholder value and unbelievable capital gain. They are still growing and their prices are rising while having pullback and volatility. Only reason to sell these types of stocks is when their long fundamentals become weak and growth stop. Any major drop in these types of stocks could consider as a great bargain. These companies have strong and anti-fragile balance sheets. Having these types companies in a portfolio will avoid over trading and losing money. We have to own companies that do not just survive but improve their competitive position in any period of economic stress. This means the management is able to learn from their mistakes. Of course to learn you have to survive, so you have to start with a bullet proof balance sheet.

Stock market is one place where market participants make lot of mistakes.
Company, stock market, politics and the economy are four different things.

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Re: The art of selling stocks

Postby Contra » Mon Jul 23, 2018 12:08 pm

http://buzz.money.cnn.com/2013/04/05/stocks-sell/

Art of the sale: When should you sell a stock?
Company, stock market, politics and the economy are four different things.

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Re: The art of selling stocks

Postby SHARK » Mon Jul 23, 2018 11:57 pm

Buying has been the ez of the 2 ~x(
Price is what you pay. Value is what you get.”


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