Knowing When to Sell a Stock: 15 Real-Life Examples to Guide Your Decision | FAST Graphs
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2022-12-20に共有
One of the most common complaints I hear from investors is that their advisors or brokers like to tell them when to buy, but never tell them when to sell. Whether those criticisms are fair or not, the sell decision is certainly the most vexing decision that investors face. Nevertheless, there are several clichés that people often turn to help with this puzzling decision.
Legendary investor Peter Lynch in his best-selling book “One Up On Wall Street” said it like this: “Just because you buy a stock and it goes up does not mean you are right. Just because you buy a stock, and it goes down does not mean you are wrong.” The point is that a rising stock may be dangerously overvalued, while the falling stock price may indicate that the company is becoming a rare opportunity on sale. Understanding this comes down to realizing, without questioning, that the market is not always right nor is it always efficient. On the other hand, it would be more correct and accurate to say that the market, although not always efficient, is always seeking efficiency.
Over the years I have learned that the price of the stock will inevitably align itself with the intrinsic value of the business. Unfortunately, the timing of that occurrence is unpredictable. Sometimes, the movement back to intrinsic value (up or down) can be very swift, at other times the valuation anomaly can continue for a tortuously long time. Therefore, you simply cannot predict how high is up or how low is down. On the other hand, you can recognize too high and too low when you see it. Once that is accomplished, you can make a rational long-term decision.
Furthermore, the prudent intelligent value investor also understands that all investments, especially investments in common stocks, derive their value from the amount of cash they provide their stakeholder.
So How Do You Know When To Sell A Tech Stock?
As I established above, the honest and the correct answer is you simply cannot answer this question with perfect precision. Instead, all you can practically expect to do is make a prudent or a rational decision. Investing is not a game of perfect. Sometimes you can sell a little early, sometimes you can sell very early. In other times you can wait too long to sell and lose big as a result. Nevertheless, they do not ring a bell at the top or bottom of the market. Therefore, for sanity’s sake you must accept that you can only make rational and intelligent sell decisions. In many ways, the same can be said about the buy decision. However, in truth and fact, the buy decision is a little more straightforward.
Apply Prudent and Sensible Strategies Instead
Instead of distressing over trying to make a perfect sell decision, try applying rational strategies instead. For example, you can place an overvalued stock on a “sell watch list” like I often do. This does not mean I immediately sell, instead, it means that I am cognizant of my risk and prepared to sell quickly if the situation warrants. However, the point is, since I know I am in dangerous territory, I watch my overvalued stocks more closely than the ones I hold at sound valuation. In other words, I am willing to ride out some volatility when I have attractive value. On the other hand, when I have “false profits” I try not to let the windfall simply dissipate into thin air. To add another cliché, “a bird in the hand is worth two in the bush.”
Additionally, once I place a stock on my “sell watch list” I simultaneously begin looking for suitable replacements at more attractive valuations. This can help combat seller’s remorse when I believe I can keep my money working with less risk and hopefully better long-term return potential.
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Time Codes
0:00 – Nvidia Corp (NVDA)
0:56 – Introduction by Chuck Carnevale
2:42– General Electric (GE)
4:10 – Bed Bath & Beyond (BBBY)
4:52 – Devon Energy Corp (DVN)
5:22 – Mosaic Co (MOS)
5:59 – PG&E Corp (PCG)
6:52 – Change Investment Amount In FAST Graphs Under Settings
7:53 – Tesla (TSLA)
10:45 – Adobe Inc (ADBE)
12:30 – Netflix Inc (NFLX)
13:17 – Thermo Fisher Scientific (TMO)
15:47 – Ameriprise Financial (AMP)
17:30 – PNC Financial Services Group (PNC)
17:45 - Ameriprise Financial (AMP)
19:34 – UnitedHealth Group (UNH)
20:00 – Centene Corp (CNC)
20:51 - UnitedHealth Group (UNH)
24:50 – Microchip Technology Inc (MCHP)
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コメント (21)
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Merry Christmas to you and yours Mr. Valuation! Always had great interactions either through the office or from content. Appreciate you all. Take a minute to enjoy the view. Providing quality and value isn’t easy, you guys have.
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Great video Chuck! Merry Christmas and Happy New Year to you and yours. Thanks for all the wisdom and insight you provide us.
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Merry Christmas to you too Chuck. Thanks for continuing your support of FAST and your outstanding advice over the years.
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Merry Christmas to you and your family, Mr. Valuation ! And thanks a lot for doing all these videos for us!
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Another great lesson. I’d asked for this topic recently and am grateful for your covering it. I have two stocks that I received in spin offs and didn’t know what to do with them. WBD and another I don’t recall the ticker. Anyway, they don’t pay dividends, have lost more than 50% of their value, don’t fit my criteria for income earners, but don’t represent more than 1% of my portfolio. I’m strongly considering harvesting the losses to off set some dividends. Thanks again. Happy holidays.
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Thanks Chuck. As an Idea for a video: Can you look at VFC in FUN Graphs and let us look over your shoulder when determining whether one might sell this stock . Seeing your general process when assessing a stock with fun graphs would be very interesting to me. So far I only have a basic subscription of FAST Graphs as I'm fairly new to investing....
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Thank you, Chuck for this and all the work you put into these videos. Happy Christmas and hopefully a prosperous and healthy 2023!
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Thank you for doing this after I made the request previously! I believe I speak for many viewers when I say I am grateful to have your mentoring and guidance. Have a wonderful Christmas and New Year to you. Have a well-deserved break from Youtube. See you in 2023.
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I always look forward to your videos, as each one is a learning experience. Your FastGraph tool has been gift for the retail investor that just keeps on giving. This was another great video. Since I have a hard time trying to determine when a stock is over-priced (10% or 20% or 30% over the orange/blue earnings line), my approach has been to simply sell 10-25% of the equity to lock in some gains and "wait and see" for the remainder. Not sure if this is the best approach, but it seems to split the difference between an "all or none" decision.
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Interesting video. You mentioned selling when the fundamentals changed. How often should you be looking at this? If you own 40 stocks, it seems like a full time gig.
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Great video as always Uncle Chuck. Happy holidays to you and yours and looking forward to what you have in store for us in 2023.
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So thankful for this content! Your contents are so insightful, it truly helps a naive investor like me.I am learning so much from you! Thank you so much for all you do, Mr. Chuck!
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Hi Chuck. What an investing tool ! What about european stocks (with international exposure)? GTT, Air Liquide, Rubis, Total Energies, Shell, BP, Holland Colours, Ibersol, Schneider Electric, Basic Fit, Roche Bobois, Pernod Ricard, Remy Cointreau, Hermes, L’Oréal, Sanofi, LVMH, Kering, Eiffage, Saint-Gobain, Vinci, Sopra Steria, ID logistic, Essilor Luxoticca, Christian Dior, Sanlorenzo Yatchs, Orange, Danone, Sanofi, Air Liquide, Patrimoine et commerce, BNP Paribas, Crédit Agricole, NN Group, JM AB, Nexity, Bassac, Allianz, Castellum, Snap-on, Bayer, Siemens, Unilever, Arkema, BASF and many many more … Money does have frontiers
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Merry Christmas Chuck! Looking forward to new FG enhancements in 2023 and lots more Mr Valuation FG videos
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Merry Xmas Mr Valuation! Big thank you for your great channel and passion. best finance content on youtube!
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Hey Chuck! Nice Shirt! Merry Christmas from Down Under. This video is one I have come to need but not asked for. Thank heavens for commenters/subscribers with more testicular fortitude. Would you ever sell a stock where the S&P Credit Rating fell dramatically e.g. B or lower. I heard the economist Mohamed El-Erian speak of this recently as something to consider before buying a stock but have noticed that yours is one of the few tools where you highlight this feature. Stay safe in the silly season my learned friend! Cheers!
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Tesla is always just one of those fan favorites and will continue to be I believe. Nice video. Thanks for your time Chuck
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Always enjoy your videos Chuck. I've never really understood the importance of tracking yield on cost. I understand the concept, but don't really see how it's useful in terms of making investment decisions. The current yield and historical dividend growth rate seem more useful in this regard.
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You're content is awesome. Thank you for sharing with all of us.
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Great video. I've learned so much. Thank you Chuch and I wish you happy holidays.
