Hello! We are a relatively new club made up of novice investors. So far, we have taken turns presenting prospective stocks and have then voted as a group on whether to buy shares. Manifest Investing, Better Investing and ValueLine are all resources that we have been using for education and research.
However, now that we are about 18 months in and own about 20 different securities, we know that we should be evaluating whether to sell some of our existing shares and/or consider buying more of things we already own.
Since this part is new to us, can any experienced club recommend methodologies and processes that have helped them determine when to sell a holding and/or whether to increase investment in an existing holding?
Stuart Lange on
How many members do you have? What is the dollar value of your portfolio? With that many holdings, are you able to keep on top of all of them? I'm only guessing, but with 20 stocks in 18 months, you may have fairly small amounts in each of them. Many of us have fallen into the trap of wanting to buy every attractive opportunity we find and ending up with so many holdings that managing the portfolio becomes a chore. You may want to consider adding to the stocks you already have rather than adding new ones.
There are a few "tried and true" rules of thumb for selling. Has the stock achieved the goals you set for it (has it appreciated out of the buy zone and into the sell)? Do you need cash for club expenses (paying off a departing member, administrative expenses, paying me for this wise advice)? Have the fundamentals of the company deteriorated (sales, earnings, anticipated total returns no longer as attractive as when you purchased the stock)? Do you have an opportunity to purchase a stock with better potential growth? Are your holdings concentrated in a narrow segment of the market (would more diversity help prevent significant loss if a particular sector or industry ran into headwinds (such as airlines, housing, cruise lines etc))?
I hope this helps, but they are only generalities. Stay disciplined, do your research, then live long and prosper..
Hello! We are a relatively new club made up of novice investors. So far, we have taken turns presenting prospective stocks and have then voted as a group on whether to buy shares. Manifest Investing, Better Investing and ValueLine are all resources that we have been using for education and research.
However, now that we are about 18 months in and own about 20 different securities, we know that we should be evaluating whether to sell some of our existing shares and/or consider buying more of things we already own.
Since this part is new to us, can any experienced club recommend methodologies and processes that have helped them determine when to sell a holding and/or whether to increase investment in an existing holding?
Lori MacPherson on
Thank you! This is very helpful. We have 24 partners and 20 stocks ($ value = $50K so far); We are able to keep on top of the stocks at the moment because one partner follows one stock in depth and over time; You are right that as we acquire more it would get harder to follow them all as well as we would need to.
How many members do you have? What is the dollar value of your portfolio? With that many holdings, are you able to keep on top of all of them? I'm only guessing, but with 20 stocks in 18 months, you may have fairly small amounts in each of them. Many of us have fallen into the trap of wanting to buy every attractive opportunity we find and ending up with so many holdings that managing the portfolio becomes a chore. You may want to consider adding to the stocks you already have rather than adding new ones.
There are a few "tried and true" rules of thumb for selling. Has the stock achieved the goals you set for it (has it appreciated out of the buy zone and into the sell)? Do you need cash for club expenses (paying off a departing member, administrative expenses, paying me for this wise advice)? Have the fundamentals of the company deteriorated (sales, earnings, anticipated total returns no longer as attractive as when you purchased the stock)? Do you have an opportunity to purchase a stock with better potential growth? Are your holdings concentrated in a narrow segment of the market (would more diversity help prevent significant loss if a particular sector or industry ran into headwinds (such as airlines, housing, cruise lines etc))?
I hope this helps, but they are only generalities. Stay disciplined, do your research, then live long and prosper..
Hello! We are a relatively new club made up of novice investors. So far, we have taken turns presenting prospective stocks and have then voted as a group on whether to buy shares. Manifest Investing, Better Investing and ValueLine are all resources that we have been using for education and research.
However, now that we are about 18 months in and own about 20 different securities, we know that we should be evaluating whether to sell some of our existing shares and/or consider buying more of things we already own.
Since this part is new to us, can any experienced club recommend methodologies and processes that have helped them determine when to sell a holding and/or whether to increase investment in an existing holding?
Jeanne Tieken on
Our club is 14 years old, with up to 25 members (22 at present), 16 stocks ("active" members each follow 1), portfolio value approaching $200,000. We're working on when-to-sell guidelines, exit strategy whenever we purchase. Covid has been difficult; Many refuse to join virtual meetings. I haven't been successful in getting them to sell "some" when our gain exceeds 100%.
Thank you! This is very helpful. We have 24 partners and 20 stocks ($ value = $50K so far); We are able to keep on top of the stocks at the moment because one partner follows one stock in depth and over time; You are right that as we acquire more it would get harder to follow them all as well as we would need to.
How many members do you have? What is the dollar value of your portfolio? With that many holdings, are you able to keep on top of all of them? I'm only guessing, but with 20 stocks in 18 months, you may have fairly small amounts in each of them. Many of us have fallen into the trap of wanting to buy every attractive opportunity we find and ending up with so many holdings that managing the portfolio becomes a chore. You may want to consider adding to the stocks you already have rather than adding new ones.
There are a few "tried and true" rules of thumb for selling. Has the stock achieved the goals you set for it (has it appreciated out of the buy zone and into the sell)? Do you need cash for club expenses (paying off a departing member, administrative expenses, paying me for this wise advice)? Have the fundamentals of the company deteriorated (sales, earnings, anticipated total returns no longer as attractive as when you purchased the stock)? Do you have an opportunity to purchase a stock with better potential growth? Are your holdings concentrated in a narrow segment of the market (would more diversity help prevent significant loss if a particular sector or industry ran into headwinds (such as airlines, housing, cruise lines etc))?
I hope this helps, but they are only generalities. Stay disciplined, do your research, then live long and prosper..
Hello! We are a relatively new club made up of novice investors. So far, we have taken turns presenting prospective stocks and have then voted as a group on whether to buy shares. Manifest Investing, Better Investing and ValueLine are all resources that we have been using for education and research.
However, now that we are about 18 months in and own about 20 different securities, we know that we should be evaluating whether to sell some of our existing shares and/or consider buying more of things we already own.
Since this part is new to us, can any experienced club recommend methodologies and processes that have helped them determine when to sell a holding and/or whether to increase investment in an existing holding?
Linda Glein on
This discussion is so timely. We had it (again!) at our investment club meeting last night.
Something that comes up again and again in clubs is someone wants criteria or a process for deciding to sell. But, what they seem to want is a 'formula' -- i.e. the price went down X percentage.
BI volunteers have laid out a number of sell 'criteria' but they are not a numeric formula. They require understanding the company and the portfolio in question, plus what's going on in the market.
Of course there is the first one, "Do you need the cash for some imminent situation?"
The club needs to understand the company well enough to answer:
Have the fundamentals of the Company deteriorated since we purchased it? (In other words, is this still a quality, growth company?)
Is the company experiencing a short-term problem, or is the problem systemic?
Or, is this stock Extremely Overvalued (emphasis on extremely.) (In other words, is there very little upside potential to the price in the next few years, and possibly a significant downside?)
The club needs to understand their portfolio well enough to answer:
If we sell this stock and purchase a different stock, will that improve the quality of the portfolio? (Perhaps to rearrange the % of Large/Medium/Small or % in each Sector to balance the risk. Or to replace a low projected return stock with a higher return.)
There is much to learn and lots of good advice in the When to Sell classes and webinars that BetterInvesting offers locally and nationally.
Our club is 14 years old, with up to 25 members (22 at present), 16 stocks ("active" members each follow 1), portfolio value approaching $200,000. We're working on when-to-sell guidelines, exit strategy whenever we purchase. Covid has been difficult; Many refuse to join virtual meetings. I haven't been successful in getting them to sell "some" when our gain exceeds 100%.
Thank you! This is very helpful. We have 24 partners and 20 stocks ($ value = $50K so far); We are able to keep on top of the stocks at the moment because one partner follows one stock in depth and over time; You are right that as we acquire more it would get harder to follow them all as well as we would need to.
How many members do you have? What is the dollar value of your portfolio? With that many holdings, are you able to keep on top of all of them? I'm only guessing, but with 20 stocks in 18 months, you may have fairly small amounts in each of them. Many of us have fallen into the trap of wanting to buy every attractive opportunity we find and ending up with so many holdings that managing the portfolio becomes a chore. You may want to consider adding to the stocks you already have rather than adding new ones.
There are a few "tried and true" rules of thumb for selling. Has the stock achieved the goals you set for it (has it appreciated out of the buy zone and into the sell)? Do you need cash for club expenses (paying off a departing member, administrative expenses, paying me for this wise advice)? Have the fundamentals of the company deteriorated (sales, earnings, anticipated total returns no longer as attractive as when you purchased the stock)? Do you have an opportunity to purchase a stock with better potential growth? Are your holdings concentrated in a narrow segment of the market (would more diversity help prevent significant loss if a particular sector or industry ran into headwinds (such as airlines, housing, cruise lines etc))?
I hope this helps, but they are only generalities. Stay disciplined, do your research, then live long and prosper..
Hello! We are a relatively new club made up of novice investors. So far, we have taken turns presenting prospective stocks and have then voted as a group on whether to buy shares. Manifest Investing, Better Investing and ValueLine are all resources that we have been using for education and research.
However, now that we are about 18 months in and own about 20 different securities, we know that we should be evaluating whether to sell some of our existing shares and/or consider buying more of things we already own.
Since this part is new to us, can any experienced club recommend methodologies and processes that have helped them determine when to sell a holding and/or whether to increase investment in an existing holding?
bmeckerle on
Linda Glein and all the others responding to your questions have great ideas. Here is one more.
BetterInvesting has many chapters throughout the country that have posted education ideas in many forms. The Rocky Mountain Chapter (I am not a member for a disclosure) has posted many, many recordings covering a multitude of topics. Open the BI website. You do not need to log in. In the top navigation bar select "Meet Our Community". In the drop down, select "Our Local Chapters". This opens a directory of all the BI Chapters. Scroll to Colorado and select the Rocky Mountain Chapter. When open, scroll to the "Our Goals" title bar and click on the live link "website". On their site, select "Recordings" in the left navigation panel. You will be amazed by the multitude of topics. The easiest way to find information about selling is to use the "Control F" feature from your keyboard. Near the top right, a window will open in which type 'sell' and hit enter. Notice the word 'sell' highlights. Select the recording and/or the handouts. Happy Selling and Buying!
Our club is 14 years old, with up to 25 members (22 at present), 16 stocks ("active" members each follow 1), portfolio value approaching $200,000. We're working on when-to-sell guidelines, exit strategy whenever we purchase. Covid has been difficult; Many refuse to join virtual meetings. I haven't been successful in getting them to sell "some" when our gain exceeds 100%.
Thank you! This is very helpful. We have 24 partners and 20 stocks ($ value = $50K so far); We are able to keep on top of the stocks at the moment because one partner follows one stock in depth and over time; You are right that as we acquire more it would get harder to follow them all as well as we would need to.
How many members do you have? What is the dollar value of your portfolio? With that many holdings, are you able to keep on top of all of them? I'm only guessing, but with 20 stocks in 18 months, you may have fairly small amounts in each of them. Many of us have fallen into the trap of wanting to buy every attractive opportunity we find and ending up with so many holdings that managing the portfolio becomes a chore. You may want to consider adding to the stocks you already have rather than adding new ones.
There are a few "tried and true" rules of thumb for selling. Has the stock achieved the goals you set for it (has it appreciated out of the buy zone and into the sell)? Do you need cash for club expenses (paying off a departing member, administrative expenses, paying me for this wise advice)? Have the fundamentals of the company deteriorated (sales, earnings, anticipated total returns no longer as attractive as when you purchased the stock)? Do you have an opportunity to purchase a stock with better potential growth? Are your holdings concentrated in a narrow segment of the market (would more diversity help prevent significant loss if a particular sector or industry ran into headwinds (such as airlines, housing, cruise lines etc))?
I hope this helps, but they are only generalities. Stay disciplined, do your research, then live long and prosper..
Hello! We are a relatively new club made up of novice investors. So far, we have taken turns presenting prospective stocks and have then voted as a group on whether to buy shares. Manifest Investing, Better Investing and ValueLine are all resources that we have been using for education and research.
However, now that we are about 18 months in and own about 20 different securities, we know that we should be evaluating whether to sell some of our existing shares and/or consider buying more of things we already own.
Since this part is new to us, can any experienced club recommend methodologies and processes that have helped them determine when to sell a holding and/or whether to increase investment in an existing holding?
Bob Mann on
One numeric sell signal is Relative Value >= 150. Make sure your SSG is up-to-date first, of course!
Three consecutive quarters slowing growth in Sales or EPS is also a strong yellow flag.
My club uses as automatic sell signal when all three of Sales, EPS, and PTP are in low single digits or negative.
Look for articles relating to PERT to get a good understanding of Portfolio Management and selling criteria.
Bob Mann
On 07/22/2020 12:12 PM Martin J. Eckerle via bivio.com <user*12801300001@bivio.com> wrote:
Linda Glein and all the others responding to your questions have great ideas. Here is one more.
BetterInvesting has many chapters throughout the country that have posted education ideas in many forms. The Rocky Mountain Chapter (I am not a member for a disclosure) has posted many, many recordings covering a multitude of topics. Open the BI website. You do not need to log in. In the top navigation bar select "Meet Our Community". In the drop down, select "Our Local Chapters". This opens a directory of all the BI Chapters. Scroll to Colorado and select the Rocky Mountain Chapter. When open, scroll to the "Our Goals" title bar and click on the live link "website". On their site, select "Recordings" in the left navigation panel. You will be amazed by the multitude of topics. The easiest way to find information about selling is to use the "Control F" feature from your keyboard. Near the top right, a window will open in which type 'sell' and hit enter. Notice the word 'sell' highlights. Select the recording and/or the handouts. Happy Selling and Buying!
Our club is 14 years old, with up to 25 members (22 at present), 16 stocks ("active" members each follow 1), portfolio value approaching $200,000. We're working on when-to-sell guidelines, exit strategy whenever we purchase. Covid has been difficult; Many refuse to join virtual meetings. I haven't been successful in getting them to sell "some" when our gain exceeds 100%.
Thank you! This is very helpful. We have 24 partners and 20 stocks ($ value = $50K so far); We are able to keep on top of the stocks at the moment because one partner follows one stock in depth and over time; You are right that as we acquire more it would get harder to follow them all as well as we would need to.
How many members do you have? What is the dollar value of your portfolio? With that many holdings, are you able to keep on top of all of them? I'm only guessing, but with 20 stocks in 18 months, you may have fairly small amounts in each of them. Many of us have fallen into the trap of wanting to buy every attractive opportunity we find and ending up with so many holdings that managing the portfolio becomes a chore. You may want to consider adding to the stocks you already have rather than adding new ones.
There are a few "tried and true" rules of thumb for selling. Has the stock achieved the goals you set for it (has it appreciated out of the buy zone and into the sell)? Do you need cash for club expenses (paying off a departing member, administrative expenses, paying me for this wise advice)? Have the fundamentals of the company deteriorated (sales, earnings, anticipated total returns no longer as attractive as when you purchased the stock)? Do you have an opportunity to purchase a stock with better potential growth? Are your holdings concentrated in a narrow segment of the market (would more diversity help prevent significant loss if a particular sector or industry ran into headwinds (such as airlines, housing, cruise lines etc))?
I hope this helps, but they are only generalities. Stay disciplined, do your research, then live long and prosper..
Hello! We are a relatively new club made up of novice investors. So far, we have taken turns presenting prospective stocks and have then voted as a group on whether to buy shares. Manifest Investing, Better Investing and ValueLine are all resources that we have been using for education and research.
However, now that we are about 18 months in and own about 20 different securities, we know that we should be evaluating whether to sell some of our existing shares and/or consider buying more of things we already own.
Since this part is new to us, can any experienced club recommend methodologies and processes that have helped them determine when to sell a holding and/or whether to increase investment in an existing holding?
Leonard E. Douglass on
I will share an overview of useful information you can get
from creating a Portfolio for your club in FINVIZ [you have
to create a free account] that I presented to my club, BI
Brighton MC in May. As you can see from the attachment you
can access a world of information about your holdings in a
Table format. A couple of items I would suggest your club
pay special attention to are the Float Short / Short ratio
in the Ownership Tab because to me a Float Short % over 10
indicates that some one may have information about a stock
that may cause the price to decline that I am not aware of.
Another useful indicator is the RSI [Relative Strength
Index] in the Technical Tab [last Page] when it is over 70%.
"The relative strength index (RSI) is a momentum indicator
used in technical analysis that measures the magnitude of
recent price changes to evaluate overbought or oversold
conditions in the price of a stock or other asset."
Thank you for taking the time to put together this presentation for us. I am somewhat familiar with finviz. I use it for some market reports and sentiment each day before placing trades. My investment club uses other sites such as yahoo finance and investors. com for most of their research. As treasurer, I put together a "Portfolio Review" spreadsheet each month to track our current holdings. The FINVIZ screeners can do much the same thing for us and I will be exploring putting some of your ideas to work. Thanks again for sharing with us.
I will share an overview of useful information you can get
from creating a Portfolio for your club in FINVIZ [you have
to create a free account] that I presented to my club, BI
Brighton MC in May. As you can see from the attachment you
can access a world of information about your holdings in a
Table format. A couple of items I would suggest your club
pay special attention to are the Float Short / Short ratio
in the Ownership Tab because to me a Float Short % over 10
indicates that some one may have information about a stock
that may cause the price to decline that I am not aware of.
Another useful indicator is the RSI [Relative Strength
Index] in the Technical Tab [last Page] when it is over 70%.
"The relative strength index (RSI) is a momentum indicator
used in technical analysis that measures the magnitude of
recent price changes to evaluate overbought or oversold
conditions in the price of a stock or other asset."
bmeckerle on
Leonard,
Could the a Float Short over 10 also be the result of investors setting the shorts relative to price movement instead of an expected bad news event?
I will share an overview of useful information you can get from creating a Portfolio for your club in FINVIZ [you have to create a free account] that I presented to my club, BI Brighton MC in May. As you can see from the attachment you can access a world of information about your holdings in a Table format. A couple of items I would suggest your club pay special attention to are the Float Short / Short ratio in the Ownership Tab because to me a Float Short % over 10 indicates that some one may have information about a stock that may cause the price to decline that I am not aware of. Another useful indicator is the RSI [Relative Strength Index] in the Technical Tab [last Page] when it is over 70%. "The relative strength index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset."
Leonard E. Douglass on
Short answer yes. What I was really trying to convey is
that a single digit Short % does not really cause me
concern, anything over 10 is a reason to see if you can
discover if some one knows something that you don't that
encourages them to bet against the stock price going higher.
A recent example is RMD. From June 15th to Friday the stock
price increased from $160 to over $200 a share. The
fundamentals don't seem to support it in the time of
Covid-19. So the question becomes How Come? A possible
answer can be found in the May 15th Valueline. RMD makes
Ventilators! They tripled their production and made over
50,000 of them in their third quarter 2020. They are due to
report their 4th quarter 2020 earnings on Aug 5th AMC. It
will be interesting to watch what happens to the stock price
on the 6th. I am long RMD but already took my principal
off the table so I am playing with the houses money.