I wrote the below on the TSLA board in June in response to a question. I hope that it’s useful. Remember that my comments were as of my thinking in June.
I tend to sell a piece if my position has gotten too big for me to be comfortable with. (Usually, that means more than 10 to 12 percent of my portfolio. However, years ago when I was still working, and could add funds to replace losses, I seem to remember letting rare positions get to 20% if I was in love with the company).
I tend to sell a piece if I feel the price has shot up wildly. I did that with TSLA, selling half, but now that I have more information under my belt, I’m nibbling again and re-building my position again). On the other hand, BOFI has gone straight up for 5 months since I bought it, but my position isn’t too big (6.4%), the rise isn’t too fast or with lots of hype, their revenue and earnings are moving up, and the PE is still well under 20… so I’ve added multiple times along the way and added a little as recently as last week. In other words I don’t sell just because something is going up.
I tend to sell a piece if I feel the story has changed. I’ve had IPGP for a long time but the last few quarters they seem to be turning into a slow grower, so I’ve reduced to a half position. I sold out of AAPL as it seems to be becoming a value play instead of a growth play. I sold out of ISRG because of all the bad publicity with the head of the GYN Association saying it was overused and of no additional benefit. While they will continue to do well I figured that hospital boards would hesitate longer before buying a new machine, and with a high PE, a slow down would drop the price.
In general when I’m thinking of selling I seem to usually sell a little first while I’m evaluating, then decide for sure what to do. I might even decide to buy back the little piece I’ve sold if I reconsider.
Hope this helps.