Learn to invest with Buffett

Chapter 54

Chapter 8 Section 6 The key time to sell stocks
When the performance of the company is not good, it is best to sell all the shares and switch to new investment opportunities.

--Warren Buffett
There are many investors who are very good at securities analysis. They have their own unique and accurate judgments on the general trend and the selection of individual stocks.However, their investment performance is often not satisfactory.A big reason for this is that they almost always sell at the wrong time.Either it is too early to sell, without being able to obtain the subsequent huge profits; or it is too late to sell, so that it finally returns to the buying point, or even gets stuck.
In fact, this situation is very common.Any investor who thinks about it may have some experiences like this. Therefore, how to grasp the best timing for selling is undoubtedly something that every investor wants to master very much.
Investors can also learn Buffett's strategy of selling stocks to make their own stocks more profitable no matter in a bull market or a bear market.Investors should resolutely sell when the opportunity to sell or meet the selling conditions is met. They don't want to sell too cleverly or artistically, but they want to sell correctly and in a timely manner.The following are some more practical selling methods for investors' reference:
1. In the early stage of market decline, if the stock price of individual stocks has not fallen deeply and the lock-in is not deep yet, you should immediately liquidate your positions and sell them.This kind of time tests whether investors can make a decisive decision and whether they have a decisive psychological quality.Only by selling in time and decisively can further losses be prevented.

2. If the stock price has already experienced a round of rapid decline, then panicking to stop the loss at this time will have limited effect.The stock market after a deep and rapid decline is very prone to a rebound. You can grasp the rhythm of the stock price movement and sell when the market rebounds.

3. In a market where the general trend continues to be weak, resolutely sell when seeing abnormal trends.If there is an abnormal trend in the individual stocks held, it means that the stock may have a larger decline in the future.For example, individual stocks that have risen abnormally in late trading should be sold decisively.The more the action of pulling up in the late market is adopted, the more it shows that the main funds have reached the point where they are unable to protect the market.

4. When the stock market falls to the bottom of a certain period, you can use the method of covering positions, because at this time the stock price is far from your own buying price, and if you sell it forcibly, the loss will often be greater.You can properly cover your positions to reduce costs, and wait for the market to pick up before selling on rallies.

It should be noted that each method has its imperfections and should not be too mechanical when used.In addition, selling at the highest point is just a luxury, so you should not care too much about profits, so as not to destroy the peace of mind.In the market, if you are too demanding, there will be only one word "regret" in the end-regret for not buying, regret for not selling, regret for selling too early, regret for taking a light position... Therefore, if you leave a little room for investment, you will lose money. If you regret a little, you can make small money often.

Investment motto:

Buying stocks will have to be sold sooner or later. The choice of timing is an art rather than a science. Investors can continuously track the public information of the exchange to find out the clues of the retreat of the main force. The risk of possible decline after fleeing.

(End of this chapter)