Update on Sell Strategy

When do we sell?

Our core idea is to buy & hold for long term there by benefit from capital appreciation & dividend yield.  But, following are the case under which force us to sell.

  1. When the stock is not performing well.  We check for consecutive quarterly results to decide on selling.
  2. When market bull run is going to over.  It is better to sell all stocks at this point else a bear run (recession) will destroy 80% of the yield

Now you can decide on:

  1. Whether to hold on a loss stock there by loosing all the profit earned.
  2. Replace a low performing stock (10% yield) with a high performing stock (50% yield)

Eg: A Reliance Communication investor started at Rs. 100 and watched till it grow up to Rs. 800 in 2008.  There after the company started making loss and had to see the  bottom price of Rs. 50.  This is absolutely foolishness.  We have to keep watch on the underlying performance of the stock.  Performance is the basis of price hike or collapse.

Similar cases are with Suzlon Energy, Unitech etc.

Let me know if you have any queries on this.

Futurecaps Chief Adviser.

8 thoughts on “Update on Sell Strategy

Add yours

  1. “When market bull run is going to over. It is better to sell all stocks at this point else a bear run (recession) will destroy 80% of the yield” – How to identify the start of bull run? Experts say that bear is identified if the index loses 20%.

    Do you mean we have to lose 20% before to sell off?

    1. I don’t see value in 20% crash! What if RBI changed a policy which crashed market for 10% & within a week US foreign policy changed with another 10% crash. There will be 20% crash! But things can rewind after that as the economy is not hit yet. In this case if we sell, we will loose opportunity.

      In Futurecaps, we observe NIFTY PE Ratio which is the barometer of econonomy. Whenever it crosses 25 levels, market crashed in another 1 year. This is happening perfectly in 2000 and 2008, so expected to happen the same in 2016. Till now the market & PE Ratio goes in tandom with our calculation.

      So we watch for NIFTY PE Ratio for selling partially, coupled with US market crash.

      Currently, the value is around 20 & we see 30% up move in market in 1-2 years. Till then we should be observing smallcap/midcap giving 1000-2000% returns (20 times) – this is our opportunity period to find undervalued stocks, profit from it.

      (Lot of small cap advisers asked to sell & then the stock went again 100% from there. The advisers are confused themselves. We recommend to sell if company not performing Or sell-everything after NIFTY PE Ratio peak out)

      FC Adviser

  2. Dear Editor, while the NIFTY PE of 25 is a good indicator of an impending significant correction, what would be the range when you start to get cautious?

  3. My question is, from where can I track nifty PE ratio? are there any other parameters apart from this.
    Can you please highlight the importance of DII & FII daily turnover (buy/sell). How it can be related in forecasting of Bull/ Bear trend?

  4. Great site, honest analysis and free…. thanks to all the site advisers… in this age of greed and dishonesty it is rare to find such a good site…that selflessly serves its readers… way to go!!!!

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