When To Sell

[robertbanking]

Hello everyone, hope you are doing well and enjoying your week. Lots of rain here.

I have had a good run with an investment Seagate Technology which manufactures hard drives i have held this for 18 months. I have a rule that i sell investments that are down 30% from the cost price. However does anyone kindly know when the best point to sell 100% of an investment that is doing well please? Would this be when financials or growth becomes less impressive please? I know for instance Warren Buffett has held Coca Cola stock for years but i suppose everyone's formula is different. If anyone had any thoughts on this i would be very grateful please, thank you for your kindness.

Thanks for all your support, it means alot. I believe this is the best forum around because of the very respectful and intelligent people in this community. Take care.

 

[divs4ever]

i normally buy with the thought of NEVER selling out completely ( at the time of buying )

i NORMALLY exit when a company goes off in directions i don't like ( i prefer to take a profit , but sometimes any recovered cash is a bonus ) or has a series of stumbles or mediocre performances .. in which case the profit might be as little as 10%

i strongly prefer to REDUCE big winners at healthy profit levels say up 150% .. double the entry price PLUS 50% ) , thinking that maybe a strong company can keep going ( give or take a few dips along the way ) of course just because a company is running hard , doesn't stop delusions of grandeur from creeping in ( like a software company dreaming it can become a neo-bank or e-bank ) in which case i might carefully make my way to the exit ( 1000% plus profit won't keep locked into the spaceship , despite the promises )

 

[qldfrog]

i normally buy with the thought of NEVER selling out completely ( at the time of buying )

i NORMALLY exit when a company goes off in directions i don't like ( i prefer to take a profit , but sometimes any recovered cash is a bonus ) or has a series of stumbles or mediocre performances .. in which case the profit might be as little as 10%

i strongly prefer to REDUCE big winners at healthy profit levels say up 150% .. double the entry price PLUS 50% ) , thinking that maybe a strong company can keep going ( give or take a few dips along the way ) of course just because a company is running hard , doesn't stop delusions of grandeur from creeping in ( like a software company dreaming it can become a neo-bank or e-bank ) in which case i might carefully make my way to the exit ( 1000% plus profit won't keep locked into the spaceship , despite the promises )

One billion dollar question (we have inflation)
There is no easy answer.
If you hope for a break out, you could sell after a few pc loss from cost price and have trailing stop.
If you invest for decades, you could buy more and be zen after 30% loss
Selling right is as important as buying right.
You make money not by selling or buying right but by selling higher than you buy.
Can not be simpler
Once you know your time frame and a style you are comfortable with, do a few google searches on:
Stop loss,
Trailing stop
Profit taking
Trend following
Some or a mix of these will fit with your view on money risk and things like platform time access.
It is not THE answer, as there is no simple one.
Hope it still helps

 

[divs4ever]

i still reserve the right to CAREFULLY buy in the dips

i originally planned to buy and hold , however i could see that wasn't going to work fast enough for me ( however i did start investing in my mid-50s maybe not an ideal time but then 2011 came to the rescue )

but the key factor in all decisions should be YOU ( and your needs )

those say in their 40's and stumbling into the markets in 2020 shouldn't be doing all that badly either ( but don't be fooled by inflation along the way )

 

[Greynomad99]

There's no right time to sell a profitable trade - it is down to your psychology - and everyone is different. Nothing consistently goes up forever but some stocks do trend up over long periods. I've found a 10% fall below a higher weekly trough works fairly well - ie keep moving your stop loss up to 10% below each higher trough. Channels are another favourite - if a stock has been in a price channel for a long time and breaks down out of it, then that might be time to jump. But the alternative view is that strong, profitable companies will always recover and if you are not into trading the rallies, trying to jump out at the top and buy back in at the bottom, then sit and hold often is the best long term strategy (but you still need some form of Armageddon stop loss).
No comment on Seagate in particular because I don't follow or trade US stocks (I can get myself in enough trouble locally!)

 

[dyna]

look up the company directors' share holdings. Have they been selling? Maybe they hardly have any skin in the game, at all. Those people know more about their own company's prospects than the all the analysts watching from afar.

 

[tech/a]

I read research a long while ago that indicated Director buying was more a leading indicator of price dropping and it's been reflected many times in trading I've checked up on.

look up the company directors' share holdings. Have they been selling? Maybe they hardly have any skin in the game, at all. Those people know more about their own company's prospects than the all the analysts watching from afar.

The overall question of when to sell is highly dependent on the timeframe.

I did an exercise back a while ago similar to the suggestion of selling when 30% down only I worked on 20% lower swing to sell then buy back again when it swings back up 20%. It performed much much better than buy and hold a stock. I posted up a chart of FMG as an example.

For shorter-term trades I like the sell on first signs of weakness which can of course be different for everyone.

Personally, I rather sell early than sell late when in a good profit.

 

[finicky]

Seagate Technology (STX) nasdaq
Weekly chart with 40 week moving average.
Comments - Some long upper wicks on candles, Jan low overlapping May high, momentum slowing.
Strong positive volume piercing line candle in late Jan muddies the picture.
Amateur thoughts only. Not advice.

Question: Why do you only consider selling the whole lot at once? Personally I sell in tranches unless I think something important has fundamentally changed. I feel insecure, I sell a tranche, get my stake + taxes back. Think about it too much, sell another tranche. Conversely, others prefer mechanical sell rules to remove emotion.
Would you buy at this price?
I try not to worry about leaving something on the table for the next guy (the buyer) who is taking on more risk than I will tolerate and deserves a reward.
Some stocks are worth holding onto long term through highs and lows but I would have to have high conviction and confidence.
I want never to be left without enough cash for a crash or other untoward events.

Good luck with it.

STX 3 year Weekly

 

[stanwell]

My position is divided into two parts: investment part and trading part.

I keep my investment potion unchanged until the price breaks monthly moving average (I use my proprietary adaptive MA). This way, I guarantee to gain from long term trend and won't be shaken out by daily noises.

My trading position is adjusted dynamically with respect to the distance between the price and its daily, weekly and monthly moving averages. When price is far away from them and there is divergence, I sell my trading portion and buy back if new entry signal appears later. If not, then I will be ready to sell my investment portion once signal is given.

Below BHP chart, where mouse is, I'd sell my trading position because it's far away from all the MAs of three timeframes and there is divergence between the price and indicator.