Should you let winners run and cut losers quick?

Holding winners for longer and selling losers faster is a well-established rule of thumb for investors and traders alike.

The idea is to offset the natural response of most people, which is to quickly sell winners (in order to lock in profits) while hanging onto losers for all eternity (in order to avoid locking in losses).

However, I’m not a fan of riding winners and cutting losers, at least as it’s commonly practised. Here’s why.

Letting “winners” run is a risky strategy

At first glance, letting winners run seems like a sensible idea. We know there’s a momentum effect, so when the price of one of your investments shoots up you should sit back and just let it rip. That’s the theory at least.

But how long should you let winners run? A month? A year? Forever?

Here’s a personal example:

In early 2011 I bought some JD Sports shares for 45.6p (adjusted for splits). That was a good idea because JD Sports eventually turned out to be a real winner in terms of share price gains.

I say eventually because it didn’t really get going until the middle of 2013. So I had to wait two years before seeing any capital gains, but after that, the share price took off like SpaceX‘s Falcon Heavy rocket.

And I’m not joking either. At their peak in early 2017, JD Sports’ shares were worth 450p each, approximately ten times what I’d paid for them in 2011.

That’s an awesome gain, so what might a “letting winners run” approach look like in this case?

Here’s a plausible scenario:

  • You invested in JD Sports in early 2011 at 45p per share
  • You put 1/30th of your £100,000 portfolio (3.3% or £3,300) into this investment because you like to hold 30 stocks (as I do)
  • This was the only good investment you made and the rest of your portfolio went nowhere between 2011 and now

When JD Sports hit its peak price of 450p in early 2017 your £3,300 investment would have ballooned to £33,000, which is obviously a good result.

On top of that, your whole portfolio would be worth £128,300, which is a 28.3% gain despite your other investments going nowhere.

But there’s a catch: Your JD Sports investment now makes up almost 26% of your portfolio and that is a massive risk to take.

After all, companies can go from good to bad to bust in just a few short years with the wrong management in charge (I won’t mention Carillion as the obvious example).

So if your starting position size of 3.3% was a reasonable amount to risk on a single company, is it sensible to have 26% invested in one company when this could happen?:

  • JD Sports’ existing CEO retires and a new CEO takes over
  • The new CEO goes on a debt-fuelled acquisition spree, buying up sports clothing companies all over the world and leveraging the company to the hilt
  • Those acquisitions are troublesome and take time, effort and focus away from the company’s existing and highly successful core brands
  • Those core brands struggle from a lack of attention and investment and lose their competitive position
  • Interest rates spike upwards, increasing the company’s debt interest payments
  • The combination of a weakening core business and suffocating interest payments leads to either a) a massive rights issue, diluting existing investors to the point where all previous gains are wiped out or b) the company defaults on its debts and joins the long list of good businesses that were killed off by bad management

That scenario is entirely possible, which is why investors need to control risk by controlling their exposure to any one company, sector or country.

Hopefully, my position so far is clear: Letting winners run and run is a bad idea because it completely ignores the winner’s position size and therefore its risk to the overall portfolio.

To avoid this problem, I use the following “rebalancing” rule:

  • REBALANCING RULE: If a holding grows to twice the default position size, sell half the position in order to maintain diversity

This will definitely reduce risk, but…

Rebalancing winners has its downsides too

Looking at my personal experience with JD Sports again, following the above rule led to a rebalancing when JD Sports reached approximately 6.6% of my portfolio (I say approximately because this isn’t an exact science).

That occurred in October 2014 when the shares hit 90p in late 2014.

At that point, I rebalanced JD Sports from 6.1% of my portfolio down to 4% and reinvested the proceeds into new investments over the next few months (I didn’t rebalance all the way back to 3.3% because I wanted to minimise how much cash I had to reinvest elsewhere).

JD Sports then went up by another 50% over the next 18 months, so I had to rebalance again. Then it went up by another 50% in just six months and so yes, I rebalanced yet again.

All of this rebalancing meant that my JD Sports investment produced capital gains of 221% between the first purchase in 2011 and when I finally sold the company in 2015 (I sold the company because the valuation was no longer attractive, which I’ll cover shortly).

If I’d simply held on for the long term and let this winner run (and ignored the stretched valuations in 2015 and beyond) then the capital gains would have been around 1,000% at the peak in 2017.

So yes, with hindsight, letting JD Sports run would have been far more profitable, but without hindsight that would have been a very risky thing to do and I would have eventually ended up with 25% or more invested in one company.

For me, controlling risk trumps everything else, so the idea of letting winners run needs to be stated within the context of risk.

And risk doesn’t just mean the position size, although that is perhaps the most important risk. It also includes other important risk factors such as valuation risk and business risk.

So a modified “let winners run” rule might look like this…

Let winners run, but only if these risk factors are within acceptable levels:

  1. PRICE RISK: Control position size by rebalancing when a position reaches 6.6% of the portfolio (or whatever your preferred maximum is)
  2. VALUATION RISK: Sell the entire position when the stock’s valuation ratios are no longer attractive
  3. BUSINESS RISK: Sell the entire position when the company is no longer attractive (e.g. when it is no longer growing, paying dividends or producing attractive returns on capital without excessive leverage)

However, some investors might argue that it would still have been better to hold onto JD Sports, do no rebalancing and capture the whole 1,000% capital gain.

Those investors might argue that a better approach to controlling risk is to sell a stock, even a winning stock, as soon as it becomes a loser.

Here’s what I think:

Selling “losers” makes no sense at all

For most people, “selling losers quickly” means using a trailing stop loss.

If an investment falls by, say, 20% from its peak, the shares are sold automatically.

This is an entirely reasonable strategy for momentum traders, but for long-term business investors, it makes no sense at all.

My main problem with stop losses is that they give decision-making powers to the market.

For example, one day you’re holding shares in Company A and you think it’s a good company at a good price. But the next day its share price falls by 20% and you’re stop-loss kicks in and sells the entire position.

So the market has effectively told you that this is no longer a good company at a good price at that the investment should be sold.

The decision to sell was based purely on the fact that the share price declined by 20% from a previous peak. It doesn’t take into account any news about the company’s current situation or its long-term future. No: The price fell so the shares are sold.

I’m sure you’ve seen this quote before, but I’ll wheel it out anyway as it’s absolutely central to how I believe long-term investors should think:

“Mr. Market is there to serve you, not to guide you. It is his pocketbook, not his wisdom that you will find useful. If he shows up some day in a particularly foolish mood, you are free to either ignore him or to take advantage of him, but it will be disastrous if you fall under his influence. Indeed, if you aren’t certain that you understand and can value your business far better than Mr. Market, you don’t belong in the game.” – Warren Buffett, 1987 letter to Berkshire Hathaway shareholders

For long-term investors, a 20% decline in a company’s share price tells you nothing about a company or its prospects.

It simply tells you that today some investors who you have never met were willing to buy and sell shares in the company for 20% less than some other investors (who you have also never met) were to pay or accept before.

But so what? As an active long-term investor, it is your job to analyse and value companies. The market’s job is to allow you to buy and sell shares in those companies as and when it suits you.

In other words, the market provides liquidity, not advice.

If you think the market knows more about the companies you’re investing in than you do then you shouldn’t be picking stocks. Instead, you should invest using the Efficient Market Hypothesis, Modern Portfolio Theory and other “efficient market” ideas.

Let’s turn back to JD Sports for an example of just how little the market knows about the future.

I bought shares in JD Sports for just over 45p in early 2011.

By November 2011 the shares had declined by 20% to 36p, so any investors using a 20% stop loss would have been stopped out with a quick 20% loss.

I assume those investors would have been happy to have “escaped” from what was then thought of as a struggling ho-hum retailer, especially as the shares eventually fell almost 40% below my purchase price, to less than 29p by the end of 2012.

A lucky escape? No, because the market has no idea what the future holds, which is why it’s such a bad idea for investors to pay attention to it.

In this case, JD Sports’ shares climbed from that terrifying low of 29p in December 2011 to a gloriously excessive 450p in May 2017, a gain of about 1500% in less than six years (about 65% per year).

Is that what you’d expect from an all-seeing all-knowing “efficient” market? I don’t think so.

For me, the market is neither efficient nor intelligent. It is simply a mechanism to allow investors (whom I don’t know) to buy and sell shares (for reasons that I don’t know) at a price which they deem to be acceptable (using criteria which I don’t know).

The fact that a company’s share price goes from 29p to 450p, or from 450p to 29p, tells me absolutely nothing about the company or its prospects. And for that reason, comparing share prices from one point in time to another point in time is something I absolutely never do.

The only thing a long-term investor should compare share prices to is the long-term fundamentals of the underlying company.

Now that I’ve got that off my chest, what are my rules for selling, if not to simply “sell losers quickly?”

My rules for selling are the same as my rules for holding

My rules for buying, holding and selling are all based on the idea that my portfolio should be filled with a diverse group of good companies trading at attractive valuations:

  • A diverse group means around 30 companies operating in a wide range of sectors and countries, with no one company taking up more than 6% or so of the portfolio
  • Good companies are companies that have features like low debts and high profitability, and the potential to grow their dividends over the long-term
  • Attractive valuations mean that expected returns to shareholders should be above average, thanks to decent dividend yields to go along with the hoped-for dividend growth

Once I’ve bought a company I’ll hang onto it for as long as the above factors remain true, i.e. that the various risk factors (price risk, valuation risk and business risk) are acceptable.

Typically I’ll only sell six companies each year at a rate of one every other month (e.g. January, March, etc.). This gives me plenty of time to think about what I want to sell and, more importantly, it stops me from making knee-jerk decisions, especially ones based on sudden share price declines.

So as per my comments on letting winners run, I’ll hang onto an investment as long as its:

  1. Position size is acceptable (I’ll cut a position in half when it reaches 6% or more)
  2. Valuation ratios are acceptable (I’ll put the company on my “sell waiting list” if the valuation ratios become too stretched)
  3. Fundamental factors are acceptable (I’ll put the company on my “sell waiting list” if any of its fundamental factors – such as balance sheet strength, profitability or growth rate – fall outside my minimum standards)

Letting winners run and cutting losers is a trading strategy, not an investment strategy

In summary then, if you’re a momentum trader then letting winners run and cutting losers quick is a legitimate trading strategy.

But if you’re a long-term investor who wants to invest in businesses through the stock market, then holding an investment just because its price has gone up, or selling an investment just because its price has gone down, makes no sense at all.

I’ll leave you with one final quote:

“Some investors — really speculators — mistakenly look to Mr. Market for investment guidance. They observe him setting a lower price for a security and, unmindful of his irrationality, rush to sell their holdings, ignoring their own assessment of underlying value. Other times they see him raising prices and, trusting his lead, buy in at the higher figure as if he knew more than they. The reality is that Mr. Market knows nothing, being the product of the collective action of thousands of buyers and sellers who themselves are not always motivated by investment fundamentals. Emotional investors and speculators inevitably lose money; investors who take advantage of Mr. Market’s periodic irrationality, by contrast, have a good chance of enjoying long-term success.” – Seth Klarman, Margin of Safety

If you search the Web for “Mr Market” you’ll find a ton of articles and quotes on this topic. This Mr Market article from Value Walk has some of the best quotes on a single page.

Author: John Kingham

I cover both the theory and practice of investing in high-quality UK dividend stocks for long-term income and growth.

26 thoughts on “Should you let winners run and cut losers quick?”

  1. Nice article. Couple of points I thought about:

    1) You mentioned holding JD sports stock for 2 years without any movement. I would consider it as opportunity cost.
    2) Selling a winner has tax implications

    I generally tend hold all my stocks and ETFs for the long run.

    1. It is not as simple as that. Selling a winner and investing in another company also carries the real possibility that you actually increase the overall risk of the portfolio. You can reduce the risk of overreliance on one company but increase the risk of missing an opportunity for real wealth creation.
      If you are lucky enough to pick a real winner, real wealth can be created by holding and watching a 1 or 2 bagger become a 10 or even 100 bagger. One or two of these in a lifetime is all it takes. This requires making decisions looking forward at the opportunity for the business to get more valuable in the future and not looking backwards at things like the price paid originally and considering exiting when the price has doubled for instance.
      it depends on mindset as an investor and there is no right answer. If you approach investing like a business person, you will be more comfortable with concentration ( I am). if you approach it as a fund or portfolio manager, you will diversify extensively but over time not have any 20-30 year multi-baggers. Some of the most successful businessmen and investors tend to have large portions of their net worth committed to a small number of businesses. I do accept that it can severely test you when things get bumpy for a specific company. In a general market meltdown, most stocks are correlated anyway ( as last week has shown) so having the same amount of capital spread amongst a larger number of companies is not necessarily great protection against a brutal drawdown.

      1. Hi Lemsip, I’d call that the “pick the next Microsoft” approach. It’s fine if you can do it, but I certainly can’t and I think 99.99999% of investors can’t either. Those that do are usually just lucky, in which case the Lottery is also a reasonable alternative.

        So for the majority of people who cannot spot the next 100-bagger I think broad diversification and strict control on position sizes is a much better and lower risk alternative. This will produce lower returns than the 100-bagger strategy, but most investors won’t spot the next 100-bagger anyway.

        As for stock correlations reducing the effectiveness of diversification, you’re right. A broad market crash will hit everything. But:

        a) investors shouldn’t worry about price declines in and of themselves, they should worry about corporate performance instead, and
        b) if an investor can’t stand the occasional 50% decline then they should have a portion in cash, or some other low volatility (or uncorrelated) asset class.

      2. The issue is not whether one can pick the next Microsoft. Obviously it is not easy to do.

        The system of selling winners because they have appreciated disproportionately implies that ‘if’ you have somehow picked the next Microsoft , you would sell it purely BECAUSE it is the next Microsoft i.e growing in value at a faster rate than the average business.

    2. Hi DG, thanks. Replying to your points:

      1) Possibly, but that’s not really how I see it. If I buy a stock at 100p and sell it 5 yrs later at 200p then I’ve doubled my money and I don’t much care what happened to the share price inbetween. This goes back to the idea that the market price means nothing – it’s simply the clearing price at which buying and selling on a particular day occurs. If I buy a business outright then there is no quoted price and all I care about is the business and its cash generating abilities.

      2) Possibly, but not in tax efficient vehicles like ISAs and SIPPs.

      Holding for the long-run: Very sensible, although I tend to be slightly more active than that, with an average holding period of about 5 years.

  2. Using Mr Market for guidance (in a very narrow sense) has vlue for me.
    If the market is clearing a stock at a value significantly below recent pricing I zm myself “Have I missed something in my evaluation of this company? Has a new event occurred which I should pay attention to?”
    Although one would wish to keep abreast of factors affecting our assessment of a share’s performance against our holding criteria, busy lives can cause us to miss things. Mr Market can therefore be one of a number of flag wavers/alarm signals that encourage us to check that all is well, or not.

    1. Hi David, that’s a good point. You’re using the market as an alarm or alert, after which you analyse the company or its environment to see if anything has happened, positively or negatively.

      I do the same, although not very formally. If I see that one of my holdings has fallen or risen by a “large” amount (20%+ or thereabouts) within say a month, then I’ll have a look to see what the cause was, if any. In the vast majority of cases I won’t take any action, but I still think it’s a good idea to keep up to date with current significant events.

      What I wouldn’t do though, and I assume you wouldn’t either, is to automatically buy or sell based on price moves alone.

  3. The truth is (like you rightly acknowledged) there is no one absolute right way to handle the issue of winners and losers. From the example you gave, if you had sold some part of your shares based on your plan, there was no way you could have gotten the fantastic result you highlighted. And that is the reason why most investors ended up struggling to beat the market averages. for me and those of us at the AOE Investors Club, Our approach is to continually evaluate the share based on the new information in order to ascertain whether the share is still undervalued or it has become overvalued. Our decision is based on the outcome of our evaluation. Even at that, you will regret some of your decisions for selling too early or for not selling early enough. That’s the way it goes. Except you have a crystal ball, there little any body can do about it.

    1. Hi Akingbe, I completely agree with what you’ve said.

      “Our approach is to continually evaluate the share based on the new information in order to ascertain whether the share is still undervalued or it has become overvalued”

      That’s the bit that most people miss. They use price as a guide to whether or not the investment is good (if it goes up it’s good, if it goes down it’s bad), but they only do that because price is very easy to find. Doing a reasonable job analysing a company is not so easy, so most people don’t do it.

  5. I agree with not exiting a “loser” based on price alone. I’m yet to determine a formal exit strategy for winners based on position size but at the moment I lean toward: Recover the initial investment after a stock has risen to two-three times the standard position size and then let it run unless the underlying business dynamics materially change. Obviously if it eclipses expectations and ends up being a massive % of a portfolio I might reconsider. Buffet’s 100% Berkshire, but then again, I’m not Buffett. Enough stocks have been 10 baggers and subsequently plummeted 95%. Not a club I want to join with a large chunk of my portfolio.

    1. The key is to make decisions based on looking forward at the prospects of the business as it stands today.
      Making decisions based on historical data ( like the price paid in the past, the gains accumulated etc) is a mistake in my view. As the investment saying goes – “the stock doesn’t know or care what you paid for it”.
      Great companies are rare but there are enough that create significant wealth for their owners over time. Most retail investors don’t participate in the wealth creation because they are shaken out easily and dive in and out based on fears of some sort.. Personally, I might trim a position for risk management purposes but never eliminate a position purely based on whether something has already been a ten bagger if the forward looking prospects continue to be attractive. For really good companies, it is also very hard to find a substitute if you do decide to sell out. Terry Smith of fundsmith has a great approach to these things I find.

      2. To me his comment, which I agree with, is contradictory to your automatic rule of trimming back the position if it raises a lot.

        Since this means you let the market tell you what price is “too much” and can make you sell a great company with great prospects for the future.

        So this is a decision based on price alone.

        Just my thoughts on the topic.

        Best,
        Slow.

      3. Hi Slow, thanks for your comment.

        “you let the market tell you what price is “too much”” – I would disagree with this. When I trim a position because it’s too large, the price is irrelevant. What matters is the position size, not the price today or the price I paid in the past. So the market is telling me nothing.

        “can make you sell a great company with great prospects for the future.” – If the company’s prospects are still good, and if the price still seems to offer good value for money, then when I trim a position I’ll only sell about half of it, not the entire position. The remaining half stays in the portfolio, hopefully to grow and produce good returns.

        Hopefully that makes my position clearer?

    2. “Recover the initial investment after a stock has risen to two-three times the standard position size” – This is an interesting one. I’ve seen other investors talk about getting back the original investment after a certain period. It doesn’t make sense from a fundamental value point of view, but I guess it can from a psychological point of view, and if it helps settle your nerves and keeps you in the “game” then I don’t see anything desperately wrong with it.

      As for the “ten-baggers that go bust” club, some people seem to enjoy the lottery ticket approach to investing, but it’s definitely something most people should stay well clear of.

  6. My approach is to set a position size when I first buy a stock and then let it do whatever it’s going to do. If it goes up 10x or 20x or more, I won’t sell a single share just because of that. I am totally comfortable with a stock growing to become the majority of my portfolio. If you cut off your big winners early you will never benefit from a single one. And I believe that any investor who invests long enough will own one or two in their investment career.

    I’m not worried about some of the gains on a stock being reversed. I don’t consider losing some of my winnings on the same idea that created them to be “risk”. The only exception I would make to this notion is if I had a certain amount of money in mind that I wanted to reach and wanted to become much more defensive when I reach it. The first million is way more valuable to a person then the second or third.

    I only sell for three reasons:

    1) I realize I’ve made a mistake
    2) The stock is clearly substantially overvalued
    3) I need the money to buy something new

    I think about 80% of the time #3 is the reason I sell.

    1. Hi Rod, that sounds very much like the early Buffett approach. Very business-oriented and not focused on share price movements, volatility as risk and all that sort of stuff.

      It’s a sensible approach if you can handle having a very concentrated portfolio (at least occasionally), but personally I do get psychologically affected by share price movements which is why I like to stay well diversified.

      But your approach is a good alternative so thanks for describing it so clearly.

    2. I totally agree with you, Rod, and adopt exactly the same approach myself so that the proportion of the 50+ individual stocks in my portfolio varies between less than 1% and 13%. My own view is that ‘trimming’ is a pointless exercise that wastes money in execution costs and is really just fence-sitting: either a stock is worth holding or, if not, should be sold.

      I have adopted and maintained this approach for the last 15 years and in that time have beaten the market (usually by a very healthy margin, with dividends re-invested) on all but two of those years which suggests that the technique is a sound one.

  7. Very good post an tremdously important issue for stock investors.
    The winners in a portfolio usually are the „cash cows“, providing a nice income stream to (re-) invest. It‘s not always easy to substitute such little cash machines after having sold them.
    Take Nestlé, Roche and Novartis in my case. I‘ve been holding stocks for around a decade, my YoC are in a range of 5 %. Their growth is slowing, dividend increases were around 2 %. I took the decision, to hold on these stocks, their business models and cash generation are intact. Instead of realizing some nice book profits, I prefer to collect the dividends and invest in companies with stronger (dividend) growth e.g. Heineken or PepsiCo.

    1. Hi FS, your point about dividends is a good one. Personally I don’t like automatic dividend reinvestment plans where the dividend is automatically reinvested into the same stock that paid the dividend. I prefer to have my dividends paid into my brokerage account, which gives me full control over where and when they’re reinvested.

      1. Hi John,

        I mentioned in my earlier post that I re-invest dividends but, like you, not automatically into the same stock. Your method of allowing them to accrue as cash for when a buying opportunity arises is, in my view, a sound one and something I have been doing for many years.

        Thanks for an interesting article, as always.

  8. Hi John

    As ever, a really interesting piece. And the comments are as enlightening and thought provoking as your piece itself. I’m glad the topic came up 🙂

    To my way of thinking, all the different ideas and approaches shown here illustrate that,

    1 – there is no right or wrong; just a series of methods all correct for the individual’s circumstances
    2 – the market, and therefore Mr Market, is very diverse

    I think Buffett says his favourite holding period is “forever”. But I imagine this is because he’s influential in all the businesses in which he holds stock, a status closed to us ordinary mortals. In addition I believe he considers that temperament and not intellect are an investor’s best qualities, and to me this implies sticking with one’s rules. If you have a rule which says “do X when Y is such”, then unless you can prove that rule has permanently broken down, you should follow it.

    I also believe that Buffett doesn’t believe success comes from being with or against the crowd. This would seem to rule out holding on for momentum, or letting winners run.

    What you said about the difference between investment and trading holds true. You are either doing one or the other. I guess you could have multiple portfolios, following different rules, but if you are considering your “low risk value investor” portfolio, you have to take off your trader’s hat, and admit when you are carrying too much concentrated risk.

    So I agree your roughly 6.6% (i.e. approximate doubling) rule holds good. But I do also think that people with a smaller portfolio should consider whether the costs of making the trade (trading costs and any tax) would mean that the sum they would be left with to return to cash might not be too small. It could be uneconomic on a small portfolio to trade at 6.6%, unless your holding is in an ISA, SIPP, etc. I’d have thought that one should have at least £500 clear before considering trimming the position when tax and trading costs are a consideration.

    Just my two penneth!

    1. Hi James, on position size in pound terms you’re right.

      As a rule of thumb I think a £1000 starting size is a reasonable minimum. That way a broker’s typical £10 trading fee is just 1% of the investment, so in theory the minimum charges for the lifetime of an investment would be 1% on purchase, 1% on exit and 0.5% stamp duty, for a 2.5% total cost.

      That would also mean an investment that doubles from the default size (whatever that may be) and needs trimming back would be cut, in this example, from £2000 back to £1000, so the sell fee of £10 would also be just 1% of the realised amount.

      Using that rule, a 30 stock portfolio should be at least £30k, which is a pretty large chunk of money for most people. I think a reasonable argument could be made that a 15 or 20 stock portfolio might be an acceptable starting point, which would require £15k-£20k. Personally I would then look to increase the number of stocks up to 30 as the portfolio grew, but that’s a personal choice.

      For investors starting out with less than say £15k I generally think they should stick with index trackers until they’ve saved up that sort of amount. If they desperately want to invest directly in individual companies then my approach in that situation would be to hold fewer stocks but still with a minimum position size of £1000 rather than a larger number of stocks with smaller positions, mostly because of the drag from fees. As additional savings are added to the portfolio the number of positions can be increased from 1 at the extreme up to a more sensible 20 or 30. But I still think starting out a very small portfolio with a passive index is the way to go. At that early stage the focus should be on growing the portfolio through additional savings rather than through investment performance.

  9. There is another problem with stop losses. The idea that if you want to sell a stock at say £10 means you get £10. Often when something catastrophic happens the stock opens 30% down and then often recovers later in the day, so you might end up being stopped out at £7., Putting in a stop loss means you might end up losing a lot more that you intended.

    The idea of letting winners run is nonsense of course. If you bought Microsoft last month it’s a loser and if you bought it last year it’s a winner. So your sell decision depends on when you bought it, as if the market either knows or cares when you bought a stock. The only thing that matters is the prognosis for the company going forward.

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