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Strategies & Market Trends : Fundamental Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (2003)	7/22/2012 10:19:59 AM
From: E_K_S	Read Replies (1) \| Respond to of 4719

Hi Sergio - So, what do you use as your "Sell" criteria? Is it when the stock becomes fairly valued and/or overvalued? Over the last few years I have been trying to arrive at a reasonable way to determine when I need to exit a stock because it is fairly valued and I can deploy those funds to better value prospects. As a result, I am trying to move my average holding period down from several years to 36 months (or less). Buffet's way is generally "Buy and Hold forever". If the company is a good earner now, it will be doing better later. Therefore, for me when I buy a stock, I also look at where I want to exit it (because it is fairly valued). My exit may just be to peel off a few shares and continue to sell shares as the stock moves higher into overvalued territory. I use the EKS$ value (where appropriate) to determine my first exit point. ATO is one recent buy where I am starting to peel off my high priced shares as I now believe the stock is in fairly valued territory. In the case of CSX, I sold my shares because the stock (to me) was fairly valued. I did not own it because I needed a "railroad" stock but rather at the time it was undervalued. Both TRN and GBX are in the same industry (railroad car & tanker builders) but have different value characteristics (see my earlier post goo.gl ). TRN also plays into my NG theme as they have a division that services the LNG market w/ tanks, tank-cars and valves. FWIW some of my best buys are "Buy & Hold forever". CVX and BHP are two I have owned since the early 90's. I only sell shares when my holdings get too large as a percentage of the portfolio. When the position exceed 10% of the total portfolio, I sell shares and deploy the proceeds into other undervalued candidate stocks. There is no right way for building the portfolio, I generally maintain a core group of stocks and then build around that. Most of my new buys are undervalued candidates and my new sells are peeling off shares of fairly valued and/or overvalued stocks. My core holdings are re balanced at least once a year. EKS