Why Selling Strategy is as Important as Buying?
Posted by SA Research Desk | Investing Framework, Stocks | No CommentsThe stock market is like a pendulum that swings from one extreme to another. While it often comes to the center, rarely does it stay there for long before moving to either of the directions. This cycle of greed and fear is what generates attractive opportunities for value investors with a long horizon of 3-5 years. However, it is crucial to identify when the cycle for our stock is approaching the other extreme so that we are able to start taking money off the table. The absence of a disciplined selling strategy can lead to large drawdowns and one can get stuck for longer with sub-optimal returns. The following few exit decisions illustrate how we emphasize this important parameter: Gujarat Ambuja Exports: The normalized operating margin for the maize segment has been …
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