When is a 'good time' to sell a stock? 

(Sep 12, 2011)

Sir,
Sorry that I do not agree with your views on when to sell your stock. It is all very well to think that when you buy a stock, you are owner of the Co. . This is all in theory. Practically at least a small investor NEVER comes to know how the M'ment is actually governing the working of the Co. Your recent poll had thrwon up the answers. Except TATA, which is another name for trust in Indian economy, NONE of the rest of the m'ments can be relied upon. Including Ambanis.
(Remember: MS Sheos, HFCL Nahata, present GTL Mr. Manoj Tirodkar, for every good m'ment there are 100s of fly by nights operators)

Why talk about Private corporates. Even Govt. owned IDBI BAnk has not given good returns to the investors. Issue price 130, thereafter one bonus and still the price is below the original issue price. One can write a book on such facts.

In practical terms, every investor should be very smart and consider Stock markets as the place to create wealth for himself and the dividend of the Co. as a source of income for his retirement. And therefore while buying the stocks, you have to be very careful and having once bought it, SELL 50 per cent OF THE STOCK AS SOON AS THE PRICE DOUBLES FROM YOUR PURCHASE PRICE. ie. Book profit as soon as the stock moves up 40 - 50per cent, rendering thereafter the purchase price to be almost 'zero'.

Thereafter if the Co. is good, it will give bonus, good dividends, WHICH SINCE YOUR INVESTMENT PRICE IS ALMOST ZERO, is the fruits of your returns for your hard earned invesmtent.

And if the co. is bad, well you have not lost any monies.

THE MARKET THROWS UP SUCH OPPURTUNITIES EVERY DAY, EVERY MONTH AND EVERY YEAR. AMPLE OPPURTUNITIES.

Hope you will appericiate this statergy.

AND THE MOST IMPORTANT ASPECT IN ALL THESE IS THAT YOU REQUIRE A GOOD BROKER.

Thanks,
Damani

Your suggestion regarding when to sell stock makes sense.Though one can also sell stocks or book profit 50% of the holdings if the stock price reaches the target price else we may miss the opportunity provided by the market.This will give a sense of satisfication and we purchase another stock available at the best price.Else it may happen that we may hold the stock for long time witnessing bear and bull phase.

Easier said than done. Barring few sophiscated investors nobody knows what is the instrinsic value of a stock.Additionally this also gets influenced by market condition,Global scenario, liquidity etc There is no one price which can be termed as intrinsic price.It is a set of assumptions

It is very good if you want to good gain in stock market.

Before buying a stock one should observe the field of the companys business its fundamentals and to which extent company havin a domination in the market, secondly perticularly in voltile market as current situation markets dancing over FII fingertips,so inveser should observe the companies business is mostly depend on local market as most of the revenues coming from local and u can observe such companies market share not much effected even huge slump in the market.

Chinese banks' debt levels r rising, hence recession...China's imports are rising & inflation declining, hence signs of economy remaining robust

its not just equitymaster, i've not been able to find a single coherent view on China anywhere

disappointed to note tht an explanation (though there's never 1) for today's market crash is not given