When to sell

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2 hours ago | Report Abuse

The same factors used to select and avoid stocks are used to decide which stocks to sell and when. Sales are indicated when the key factors supporting an original buy are gone. Here is a summary of such factors: (1) Internal: dubious management behaviour, vague disclosure or complex accounting, aggressively increased merger activity, dizzying executive compensation packages. (2) External: intensifying new competition, disruptive technological onslaughts, deregulation, declining inventory and receivables turns. (3) Economic: shrunken profit margins; declining returns on equity, assets, and investment; earnings erosion; debt increased aggressively in relation to equity; deterioration in current and quick ratios.

Be the first to like this.

7 comment(s). Last comment by Sslee 17 minutes ago

Sslee

5,937 posts

Posted by Sslee > 1 hour ago | Report Abuse

Mind explain why Warren Buffett sell Bank of America stock?

Warren Buffett has added around $6 billion to Berkshire Hathaway's sizable cash pile this summer with a string of Bank of America stock sales since mid-July

Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥

13,046 posts

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 1 hour ago | Report Abuse

Banks in US are risky investments at moment. Look at SVB bank, the bank that failed last year. Due to high Fed interest rates, the bonds it held was below book value and when there was a run on the bank, it was illiquid and went under very quickly. Banks are highly leveraged.

It is also known that many banks in US have balance sheets not dissimilar to that of SVB.

Why is Buffett raising cash? He probably think the market was overvalued and maybe banks are risky bets today. Buffett is a master of market "timing" too. He has been right in the few times he called the market tops and bottoms; and these were often at the extremes of the markets.

Sslee

5,937 posts

Posted by Sslee > 44 minutes ago | Report Abuse

Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ SSLee Value investing is very much pricing the market/stock, and not timing the market/stock.
22/08/2024 3:56 PM

Warren disposed many of his stocks holding is he pricing the stock/market or timing the market/stock crash?

Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥

13,046 posts

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 24 minutes ago | Report Abuse

SSLee. It is extremely difficult to time the market. Those who claim to be able to do so consistently are not honest.

However, at the extreme of the market, you may have a high probability of being more right than wrong. It is just that pricing coincides with timing at the extremes of the market. Even then, Buffett called the bottom of the market in Sept 2008, coinciding with the Lehman bankruptcy. The market continued to go down and only reverted in March 2009.

At the top and the very bottom of the price trend, only a few transactions occurred

Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥

13,046 posts

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 23 minutes ago | Report Abuse

Buffett buys and sells based on pricing and not on timing.

Sslee

5,937 posts

Posted by Sslee > 19 minutes ago | Report Abuse

So taking profit is not a bad idea as you do not need to hold your beloved stocks forever.

Sslee

5,937 posts

Posted by Sslee > 17 minutes ago | Report Abuse

Today going to be a bloodbath opening.
Is it time to pick up some stocks?

Post a Comment
Market Buzz