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11 Reasons I will sell a stock:
1: Thesis busted / I made a mistake
I was wrong on the moat $GRUB
Outside forces matter more than I thought $KMI
Management can't execute $TRIP
Brand deteriorates $UA
Company is being disrupted
1: Thesis busted / I made a mistake
I was wrong on the moat $GRUB
Outside forces matter more than I thought $KMI
Management can't execute $TRIP
Brand deteriorates $UA
Company is being disrupted
3: Mega-acquisition I don't like
Big acquisitions tend to destroy value and distract management
AOL / Time Warner = poster child
Relative size of biz is important.
$100 billion biz buys a $3 billion biz = OK.
$4 billion biz buys a $3 billion biz = big deal
Big acquisitions tend to destroy value and distract management
AOL / Time Warner = poster child
Relative size of biz is important.
$100 billion biz buys a $3 billion biz = OK.
$4 billion biz buys a $3 billion biz = big deal
4. Thesis complete with no compelling second act
The company achieves the mission (hooray!) but no second biz line to drive growth
Hard to judge, but if organic rev growth falls below ~5%, I'll move on
Why I sold $AAPL 2 years ago https://www.fool.com/investing/2018/06/10/10-reasons-why-im-selling-all-of-my-apple-stock.aspx
The company achieves the mission (hooray!) but no second biz line to drive growth
Hard to judge, but if organic rev growth falls below ~5%, I'll move on
Why I sold $AAPL 2 years ago https://www.fool.com/investing/2018/06/10/10-reasons-why-im-selling-all-of-my-apple-stock.aspx
5. Culture Deterioration
Glassdoor rating plunge
Mass management exodus
Leadership transition isn't working out
Glassdoor rating plunge
Mass management exodus
Leadership transition isn't working out
6. Extreme valuation compared to the opportunity
Very high valuation + lots of room to run = OK
Very high valuation + running out of room to grow = watch out
Very high valuation + lots of room to run = OK
Very high valuation + running out of room to grow = watch out
7. Too Large of a position for me
I'm OK w/ 15% of my port being in amazing, low risk business like $MA / $AMZN
For an amazing, high-risk business like $TSLA, I'll cap it at 10%
I'm OK w/ 15% of my port being in amazing, low risk business like $MA / $AMZN
For an amazing, high-risk business like $TSLA, I'll cap it at 10%
9. Company acquired
If a company gets bought out and it has a high likelihood of going through, I sell
I don't like it when this happens. I'd rather own a compounder for years instead of getting a 1-time gain.
If a company gets bought out and it has a high likelihood of going through, I sell
I don't like it when this happens. I'd rather own a compounder for years instead of getting a 1-time gain.
10. I need the money for my personal life
Major purchase on the horizon (car, home repair, vacation) and I want to use stock gains to pay for it
Major purchase on the horizon (car, home repair, vacation) and I want to use stock gains to pay for it
11. Tax-loss harvesting
I'll sell losers that I've lost confidence in to lower my tax bill
I'll sell losers that I've lost confidence in to lower my tax bill
All of these 'rules' are in the "when to sell" tab of my public spreadsheet
https://docs.google.com/spreadsheets/d/1y8quPLqAwNsBGvNUrJuMTqVwz-P59ms1A8ZDLE8Dc24/edit?usp=sharing
https://docs.google.com/spreadsheets/d/1y8quPLqAwNsBGvNUrJuMTqVwz-P59ms1A8ZDLE8Dc24/edit?usp=sharing
What did I miss?
When do you sell?
When do you sell?
