For me selling simply would come when I feel that the growth of the company will come down from let's say 50% y-o-y to 30% year on year. It is based on a feeling and leads to possibly an early exit, sometimes maybe even losing some or a lot of possible gains from a premature exit.

 

This is what i can think of currently...shall update when I can think of some other reason(s).

Edited by omshivaya - 14/Dec/2007 at 11:57pm

My dream is to buy such companies which I never want to sell. Generally the points that i look for are something wrong in the business model maybe a competition, or management intgrity prob etc; mkt cap going to levels more then 25% of global leaders with dispropotionate valuations; PE exceediing 40 times forward irrespective of growth; better alternative ideas for that money with favourable relative risk reward scenario; couple of quarters with more promise and low delivery without adequate reason for low delivery of resulta; industry specific problems like export and dollar etc ~~ It is really very subjective and a combination of variouss factors.

A stk is a Sell when

1. Fundamentals of the company change drastically e.g. All of a sudden Govt brings some sector under regulation restricting growth of the company indirectly.
2.External factors such as Emergency e.g You are invested in ENIL,TV18,Times of India (not listed but e.g any other listed entity in the space) and Newpaper,TV,Radio are banned for a indefinite period.
3.When you have some other opportunity which is better than the existing one . e.g you r invested in a company which grows 25-30% yoy, and you find another comapny growing 50% yoy. Now it is a debatable question whether you sell HDFC Bank and invest in Kotak/Yes Bank which are growing faster, in this case it depends on the style of investing. Same thing can be applied across the sector if you believe in holding very few no of stocks.

I take a review of every stock and compares with every stock in the portfolio on a quarterly basis (max 6 months ) and sell Laggards ...(A growing company cant be laggard for 6 months,  if it is so, then it is not growing or doing well.

Govt. diktat can and has never finished any industry permanently so any such move should create buyinng opportunities for that capital which can be put in for temporary pain and long term gain. l