Last week, I said you shouldn't sell a winning stock just because it's too much of your portfolio. That resonated with many people but some said you should sell "if it helps you sleep at night."

I hear this peace-of-mind argument a lot. Here's a thread on my thoughts on this

Let's say you make 10 equal $1k investment. 5 will be losers, 4 will be market performers, 1 will be a 100-bagger. That 100-bagger can be lifechanging, but if you refuse to let it get above say 10% of your portfolio, you're also refusing life-changing benefits

Why might a person "not sleep well at night"? Many people say it's the unique psychology of each person. But could it be that we need to improve our investing psychology? If you're not sleeping good at night, it might be because your goals are all wrong.

People ask me about Magnite $MGNI, which is now a ridiculous portion of my portfolio after a 500%+ run. How do I sleep? By not making 500% my goal. I feel no need to lock in gains or anything. Locking in gains requires me to call the top, which I know I can't do.

Think about it: You'd sleep GREAT at night if you KNEW your largest position was GUARANTEED to double over the next year, wouldn't you? You'd be having Scrooge McDuck dreams diving into the coins in your money vault.

What's robbing you of sleep isn't how big a stock is in your portfolio. What's robbing sleep is not knowing if right now is the top. You have a lot riding on a position, and you fear it going down even in the slightest. Somehow, your goal has become timing the market

My goal is 15% annual returns. I know if I hit this for 2 or 3 decades, I'll be a hall-of-fame investor. I sleep great at night with Magnite because I already have a massive lead in the game I'm playing. I know it could get cut in half over the next 5 years and I'd still be ahead

That said, I still see plenty of upside catalysts for Magnite over the next decade. Why would I sell? Sure, it could go down. But again, I'm ahead of my annualized goal by a mile. I can keep holding while the thesis plays out.

There are valid reasons to sell a stock. But I don't believe trying to improve your sleep is one of the better reasons to sell. My encouragement in that situation would be to change your framework, mentality, or goals. Don't throw out your 100-bagger after 5 bags