How do you decide when to sell a stock? | TigerDroppings.com

Posted byMessage
LSUTOM07
LSU Fan
Baton Rouge
Member since Dec 2011
479 posts

How do you decide when to sell a stock?


This is something I am struggling with. I have a hard time not locking in gains when I am up more than 15-20%. What methods do you use to determine if a stock should be sold or held on to after nice gains?






Back to top
Share:
LSU0358
LSU Fan
Member since Jan 2005
5127 posts

re: How do you decide when to sell a stock?


This is the method I use, keep in mind every investor/trader has a different theory on this.

If you are worried about losing all of your gains place a stop order to lock in some of the profits. Steadily move up the stop as the price increases. If the stop is hit, well congrats you exited the trade with a nice profit.

Stops are also very important to use when a stock is going against you.






Back to top
  Replies (0)
LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
80468 posts
 Online 

re: How do you decide when to sell a stock?


I usually sell just before the stock goes up 25%.





Back to top
LSU0358
LSU Fan
Member since Jan 2005
5127 posts

re: How do you decide when to sell a stock?


quote:

I usually sell just before the stock goes up 25%


I sold Apple at $125ish in June of 2009. There was no way in hell it would ever go above $150.






Back to top
  Replies (0)
Vols&Shaft83
Tennessee Fan
Member since Dec 2012
12459 posts

re: How do you decide when to sell a stock?


I have a bunch of stocks that I never sell, EVER.

For the stocks that I will, short term positions, I only sell for 1 of 3 reasons:

1.) The stock hits the price target I had when I bought it. (different for different stocks. but generally, 35-100%)

2.) After a merger, can usually sell shares at a 20-40% premium, and usually mergers have a lousy track record of being successful.

3.) A better opportunity comes along, but it has to be significantly better for me to exit a position that hasn't had a chance to hit its target.



You may have to sell for 1 other reason, the company declares bankruptcy .




This post was edited on 5/21 at 1:28 pm


Back to top
Janky
LSU Fan
Team Primo
Member since Jun 2011
7637 posts

re: How do you decide when to sell a stock?


I typically ask myself if I would be willing to buy it at the elevated price. If the answer is no, I will then put a stop around there. There are also a few elementary technicals I look at to get an idea if I think it will keep going.





Back to top
b-rab2
LSU Fan
Lafayette
Member since Dec 2005
9706 posts
 Online 

re: How do you decide when to sell a stock?


There's a few stocks that I don't sell. Others I just try to lock in 5-7% and wait for it to drop again. Others I hold for large gains like 20-25% then I usually get out.





Back to top
  Replies (0)
GetBackToWork
LSU Fan
Member since Dec 2007
1047 posts

re: How do you decide when to sell a stock?


In similar vein to other responses, consider selling when it becomes an outsize holding in proportion to other stocks.

Apple is an extreme, but valid example. A one thousand dollar stake took on something ridiculous in time. Many managers would suggest rebalancing. A category of energy stocks might be another example. Say you target having 25% in energy holdings. They perform, rise in value, then constitute 50% of your stocks. Trim them down to meet your targets.

This assumes a longer term outlook, and a focus on the overall portfolio.






Back to top
  Replies (0)
Zilla
LSU Fan
Friendswood, TX
Member since Jul 2005
9913 posts

re: How do you decide when to sell a stock?


ya'll don't get smoked with all those sucker stops sitting out there ? are we only talking about blue chips ?





Back to top
PlanoPrivateer
LSU Fan
Frisco, TX
Member since Jan 2004
1328 posts

re: How do you decide when to sell a stock?


Zilla, what is a sucker stop?





Back to top
lighter345
New Orleans Pelicans Fan
Member since Jan 2009
10391 posts

re: How do you decide when to sell a stock?


Am I stupid for holding on to stocks that have 100% and 199% returns if I really don't need the money?(no brag got lucky)

Also if I sold one of the stocks it would be within one year so wouldn't I have to pay a nice short term capital gain tax on that?



This post was edited on 5/21 at 5:48 pm


Back to top
Lsut81
USA Fan
Member since Jun 2005
64150 posts

re: How do you decide when to sell a stock?


quote:

How do you decide when to sell a stock?


Good question... I def would like to see the boards response on this.

I know a lot of stocks are at or near all time highs right now, I'm trying to decide whether to continue the ride or begin cashing out and diversifying more






Back to top
  Replies (0)
Mr. Curious
LSU Fan
God's Country
Member since Aug 2004
313 posts

re: How do you decide when to sell a stock?


I usually sell when I don't hit the Monday night football bailout parlay. Don't want Moose or Rocko to come calling with nothing to give them.





Back to top
  Replies (0)
Vols&Shaft83
Tennessee Fan
Member since Dec 2012
12459 posts

re: How do you decide when to sell a stock?


quote:

Am I stupid for holding on to stocks that have 100% and 199% returns if I really don't need the money?(no brag got lucky)

Also if I sold one of the stocks it would be within one year so wouldn't I have to pay a nice short term capital gain tax on that?




I'll use one of my own trades as an example. Just to simplify, I'll use round numbers and not include trading fees.

Last May I bought 1000 shares of Sprint @ 2.50/share

1000 x $2.50= $2,500 is my investment

Let's say buy May 30th it hits $7.50/share (very likely btw). Or a 200% gain.

My investment is now worth $7,500


My play is to take keep my original $2500 in Sprint because I think it could go to $12/share, and take the $5,000 gain and roll that into 2 other stocks, let's say XOM & Microsoft because I'll hold them forever and collect dividends.

So now my initial $2,500 in Sprint is still in Sprint and I have 2 New stock positions that I didn't have to pay for.

Make sense?

Tying from Tablet so bare with me







This post was edited on 5/21 at 7:06 pm


Back to top
foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
29838 posts

re: How do you decide when to sell a stock?


I don't worry about it. Every time bitcoins peak I sell them and buy dinars. Eventually the trend reverses and then I sell the dinars and load up on bitcoins again.

My main problem is that the medical bills for heart attack treatment is eating up the profits.






Back to top
Vols&Shaft83
Tennessee Fan
Member since Dec 2012
12459 posts

re: How do you decide when to sell a stock?


I'm still long on Beanie Babies and Tickle Me Elmos





Back to top
  Replies (0)
Zilla
LSU Fan
Friendswood, TX
Member since Jul 2005
9913 posts

re: How do you decide when to sell a stock?


quote:


Zilla, what is a sucker stop?



I once bought some shutterfly stock for $6 or something (close to $50 today ) ....they had a CC coming up and I wasn't really sure what to expect so I put in a trailing stop limit/loss the day before... the stop was at like $5 or something ...a good 20% off that days last trade.....All I know is the 1st trade that morning after the good CC was for something stupid like 100 shares at 4.99...triggered my stop loss, my entire position dumped (which was exactly the 2nd trade of the day, I had fidelity check the tape), then the next trade was for like 6.50, etc etc...they ended the day at like $8 ...I was pretty pissed....haven't used a stop since..... I think the practice is called "running stops"... supposedly the market makers can see the stops out there...

LINK

If someone knows a way to use them but prevent this from happening, my portfolio could use the help....



This post was edited on 5/21 at 10:48 pm


Back to top
lighter345
New Orleans Pelicans Fan
Member since Jan 2009
10391 posts

re: How do you decide when to sell a stock?


Yea makes complete sense. But what if you had bought those shares last September? Would you wait until sept to sell, even though it hit that 7.50 in May?


This post was edited on 5/21 at 10:20 pm


Back to top
matthew25
Ole Miss Fan
Member since Jun 2012
3364 posts

re: How do you decide when to sell a stock?


I had 1000 share of Home Depot. The P/E was around 25; I prefer somewhere 15-18, so I sold half.

It still continues to climb!






Back to top
  Replies (0)
Janky
LSU Fan
Team Primo
Member since Jun 2011
7637 posts

re: How do you decide when to sell a stock?


quote:

If someone knows a way to use them but prevent this from happening, my portfolio could use the help....


Yeah, I understand what you are saying about stop orders. Once your set price has been broken it becomes a market order. In your case it gapped down at the open and you got screwed. You can always use a stop limit orders and put 2 prices in, but it gets more complicated.






Back to top
  Replies (0)


Back to top