Your on the right track but I would suggest don’t be too automated in whatever “system” you write down
For me it’s a combination of:
- Primarily fundamentals of yoy recurring increasing, or at least reasonable, revenues
- The company remains well run
- The company remains best in class
- Be slow to buy but slower to sell
- If you feel you would want to buy the stock if it fell to “x” price, then for me ... DONT SELL!
It really is as simple as that. I am more and more coming to realise that taking profit on a company you would buy back if the SP halved is a huge mistake.
- Only sell when you no longer want the stock at any price.
- if the stock does fall a lot, always have some cash on the sideline to top up
I do occasionally sell a stock if i think the story has changed and I’m unsure about it’s future, but I will happily get back in if it runs higher and I’ve decided I made a mistake selling in the first place.
Its psychologically difficult to buy a stock at a much higher price than you originally had it for. I see this all thr time on this forum: “ had this stock at X and sold, so annoyed i did as ive watched it climb higher ever since!”
My question: why didn’t you just admit your mistake and buy back in higher? ( generally it’s the psychology of not wanting to buy it higher than wha you had it!)
Here are some of my examples of admitting my iwn mistake and buying back in:
- Sold alu at $7, bought back at $10
- A2 at $9, bought back $11
- nea sold 90c, bought back $2 ( but very happy i did)
- appen i sold at $2.50, bought back heavily at $10 ( that one still hurts me, but I’ve learnt from it. But, now I’m so glad I did buy back in at $10. I even doubled up at $15 and when it dropped from $24 to $22 on its last excellent acquisition, I tripled up!)
lessons ive learnt, I’m not selling apt, xero, lovisa, mvp, bubs through thick and thin. I’m just letting them run. Some if these have started well, only to see my whold profit disappear and turn to loss, but i metrly held or even topped up if thd story was strengthening.
This forum HC is toxic fir convincing you to take profit, which many punters do saying : “ great stock but its a pump and dump so im out for now, will be back when SP drops!” You read so much of it you start to follow it!
Its crap.
What are your thoughts?
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