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

To: Madharry who wrote (78179)	10/5/2025 8:59:12 AM
From: E_K_S	Read Replies (1) \| Respond to of 78465

Fidelity Magellan Fund, Peter Lynch. "Selling your winners and holding your losers is like cutting the flowers and watering the weeds"

To: Madharry who wrote (78179)	10/5/2025 5:32:13 PM
From: Sean Collett	1 Recommendation Recommended By Truedarkblue Read Replies (1) \| Respond to of 78465

I suppose a question I ask is why let losers stand? How low should you let a loser go before its just culled from the portfolio? If you're selling winners to fund losers then perhaps the framing should be shifted to the losers themselves and when to cut them? If one buys a stock at $15/s and has the fair value around $22.5/s which is a 50% gain but that stock drops to $10/s instead this should be an inflection point to ask "is the market wrong or am I?". $10/s now requires a 50% gain to breakeven and then a 125% gain to get to your target price. Maybe in today's market thats achievable but no sense letting bad habits form in my view. At this inflection point if you see fundamentals still alive then you can of course add more but for me a rule I've adopted is to only average down once. Market already told me I was wrong once no need to flood more money to be told again. Otherwise at a ~33.3% decline I also follow the rule to walk away and wait for some confirmation to go back. This inflection point is where you should be asking if you're better off pouring winning money here or just holding into what's already working. Next question is when to sell a winner and this one is harder for me. Selling a loser has become easy and I have no issue walking and/or waiting. Winners I find a safe rule has been at 50% to take my chips and walk. The issue is watching a stock go well beyond 50% and missing out on gains. Timing is a big contributor for me. If i see a fast run up +30-50% then I have no issue cutting like I did with AEO. As fast as market gives its quick to take. For the rest it's still a challenge I struggle with. For those I have let run I usually follow a 10% pullback rule and if I see a winner pullback 10% thats a good signal to start trimming or exiting depending on news or fundamental changes. I don't know if overvaluation is a reason itself to sell, but of course its not a reason to buy more. A thought then is how much concentration does this winner have in your portfolio now? If it starts to creep into a majority holding concentration risk grows and perhaps trimming is ideal? Just my $0.04 (adjusted for inflation). Happy investing, Sean

To: Madharry who wrote (78179)	10/6/2025 12:21:48 AM
From: Paul Senior	Respond to of 78465

duplicate

To: Madharry who wrote (78179)	10/6/2025 12:30:55 AM
From: Paul Senior	Read Replies (1) \| Respond to of 78465

"...are you really bettter off not trying to rebalance your portfolio just because shares in one company or industry have appreciated. should you sell more of your winners to fund more purchases of your losers?" Yes, not much analysis I've found on this. I was shocked to read Charlie Munger say something like, "Yes, I know Costco's stock is overvalued, but I'm not intending to sell any share at any time. Well he was a company director, so maybe he felt he should hold all, but I believe he would sell some anyway if business took some real impairment. And too, at age 99. not much difference looking out long-term as to whether he sold or held. His example resonates with me though, because for example I've trimmed full position in AAPL, and regret having done that. One thing though, if I trim a good-size winner, the funds would not likely be going into more purchases of losers. I prefer to put the proceeds into different stocks where at the moment the opportunities seem good. I might add to my losers, but not with proceeds from my winners.

To: Madharry who wrote (78179)	10/7/2025 12:55:03 AM
From: Paul Senior	Respond to of 78465

GOLD. I'm building a position as the stock moves up. Just a speculation that as the govenment makes it seem like our country in turmoil as a result of abrupt changes to long-standing government polices or standards, more and more people will make a point of wanting some gold or silver in their accounts. I like Sprott GOLD, because it holds the physical asset. And it's headquartered outside of the USA (Canada) Further if/as gold price increases, it should be easy for me to see GOLD increase also. With ETFs holding mining companies, the share prices depend on extraction costs (labor, taxes, etc), life of mines, etc. I don't see strong gains in GOLD from here, but otoh, it's hard for me to visualize price of gold going down much given our current unsettled environment.