This framework is incredibly helpful - especially breaking down sell signals by stock type. The Meta example really drives home the difference between "the market is overreacting" versus "fundamentals are actually broken." That distinction alone is worth everything. The checklist at the end cuts through so much noise: has quality deteriorated, has valuation outrun fundamentals, has competitive advantage weakened, has management lost their way.
Question: When you're monitoring a position and see one yellow flag - like valuation getting stretched on a fast grower - how long do you typically give it before acting? Do you wait for a second signal to confirm, or is one enough? Curious how you balance being decisive versus giving a quality company the benefit of the doubt.
I usually give the companies I own the benefit of the doubt. This is simply because I only buy what I consider to be great companies. And it can often be daunting and even expensive (due to transaction costs and tax requirements) to sell a position.
Adding to that, when a stock (at least a fast grower) is expanding its multiple, the momentum can carry the stock for months. So even if we start to see increasing multiples, I usually hold to «ride the wave of momentum» and sell once the stock stagnates.
i dont own stocks like Palantir, but if I did, selling out at a high multiple would have made you miss a crazy multibagger.
My newsletter is mostly about trading and investing but I also write about mindset, psychology, and discipline: how to stay positive, steady, and consistent when life gets hard.
Here’s my most recent post where I need your help. Would love if I could get your opinion. Take less than 2 minutes:
My newsletter is mostly about trading and investing but I also write about mindset, psychology, and discipline: how to stay positive, steady, and consistent when life gets hard.
Here’s my most recent post where I need your help. Would love if I could get your opinion. Take less than 2 minutes:
This framework is incredibly helpful - especially breaking down sell signals by stock type. The Meta example really drives home the difference between "the market is overreacting" versus "fundamentals are actually broken." That distinction alone is worth everything. The checklist at the end cuts through so much noise: has quality deteriorated, has valuation outrun fundamentals, has competitive advantage weakened, has management lost their way.
Question: When you're monitoring a position and see one yellow flag - like valuation getting stretched on a fast grower - how long do you typically give it before acting? Do you wait for a second signal to confirm, or is one enough? Curious how you balance being decisive versus giving a quality company the benefit of the doubt.
I usually give the companies I own the benefit of the doubt. This is simply because I only buy what I consider to be great companies. And it can often be daunting and even expensive (due to transaction costs and tax requirements) to sell a position.
Adding to that, when a stock (at least a fast grower) is expanding its multiple, the momentum can carry the stock for months. So even if we start to see increasing multiples, I usually hold to «ride the wave of momentum» and sell once the stock stagnates.
i dont own stocks like Palantir, but if I did, selling out at a high multiple would have made you miss a crazy multibagger.
Good post mate
Thank you, appreciate the comment.
Hey I would love to connect with you!!
If you are also interested by my work of course.
My newsletter is mostly about trading and investing but I also write about mindset, psychology, and discipline: how to stay positive, steady, and consistent when life gets hard.
Here’s my most recent post where I need your help. Would love if I could get your opinion. Take less than 2 minutes:
👉 https://substack.com/@midaxtrading/note/p-181228132?r=6q0teo&utm_medium=ios&utm_source=notes-share-action
Hope to see you around, and keep up the great writing! 🚀
Brilliantly written.
Thank you, Chike! Appreciate the comment.
Hey I would love to connect with you!!
If you are also interested by my work of course.
My newsletter is mostly about trading and investing but I also write about mindset, psychology, and discipline: how to stay positive, steady, and consistent when life gets hard.
Here’s my most recent post where I need your help. Would love if I could get your opinion. Take less than 2 minutes:
👉 https://substack.com/@midaxtrading/note/p-181228132?r=6q0teo&utm_medium=ios&utm_source=notes-share-action
Hope to see you around, and keep up the great writing! 🚀