Showing posts with label hold or sell. Show all posts
Showing posts with label hold or sell. Show all posts

Friday 13 July 2012

To Sell or to Hold Checklist

To Sell or to Hold Checklist
http://www.bivio.com/crowriver/files/Webpages/To%20Sell%20or%20to%20Hold%20Checklist.pdf


Portfolio Management Workshop


PORTFOLIO MANAGEMENT

Portfolio Management essentially consists of the activities that help investors reach desired investment goals. It is the art of optimizing holdings and increasing the value of a portfolio. And it takes some common sense and diligence to do it successfully. At times, it even takes a little courage.

This workshop will discuss the process and the tools at your disposal to make the most of your investments. It may also suggest some answers to some of the questions you may have about when or why you should sell your stocks and what you might want to do in today's market.

Monday 16 April 2012

Value investing – When to Sell or Hold?

A good discussion on when to sell in another blog.

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12:30 pm
April 10, 2012

matthew

Member
posts 13
9
Yes, I did this on Aeropostale. Approximately a 32% gain I got on that bad boy.
Reasons I sold, it had trouble getting past $21-$22, and then Barclay's raised there price target to $25 so more investors bought and price went up a bit. I took this chance and sold it, and it has now went back down after today -5%. Keep in mind that I sold it early basically because my intrinsic value was around $23 and I figured i'd rather sell now than risk more just for a small additional gain.

If I had not sold it then I would have been stopped out as during the price consilidation period I put in a stop loss @ $21
10:55 am
April 10, 2012

Jae Jun

Admin
posts 1408
8
do any of you sell after a big fast run up even though it is below intrinsic value?
6:29 am
April 1, 2012

nell

Member
posts 88
7
Some reasons to sell..


1. intrinsic value < price -> no margin of safety
2. business quality goes south, management issues etc.
3. better opportunity


One good reason to buy more is when market tanks but intrinsic value of your specific company keeps growing..

Best wishes,
Nell
10:58 am
March 31, 2012

BugMan

New Member
posts 2
6
I'm fairly new to this, and I, too, see selling as the hardest part.

One thing i've thought of that makes it easier is compare your current holdings to what else is out there. If are holding onto a good company, and you figure it has the potential to go up 12% per year, but you see other companies out there that have the potential to go up 25% per year, then sell your current stock and buy the other ones. It's not that the old company isn't good — it is — it's just that there are better deals out there.
8:03 am
February 27, 2012

gstyle

Member
posts 4
5
I am fairly new to value investing so I find it good to know other have had similar thoughts to my own!
2:17 am
February 25, 2012

Jae Jun

Admin
posts 1408
4
selling is defnitely harder than buying.
One of my weak points as well. If I had a partner, I'd find someone who was better at selling than buying. It would be a great combination.

But to sell, you would have to re value a company regularly.
If there isn't much upside to intrinsic value, then I'm willing to sell at 10% below intrinsic value rather than hanging on.
Companies like GRVY, I am happy to hold even if I'm up 100%.
8:17 pm
February 22, 2012

jalleninvest
Coronado, CA

Member
posts 22
3
Post edited 8:20 pm – February 22, 2012 by jalleninvest
G.raham came up with the 50% or two years towards the end of his life, in that interview that is bandied around the internet some. I am not at all sure that he practiced that in the Graham Newman closed end fund he ran. In one case, he did not, and that was GEICO which they bought half of in 1947 or 1948. They ended up having to distribute the shares to the shareholders of the fund, and it increased 54,000 per cent or something like that. Many became multimillionaires, quite a feat back then.
Walter Schloss, who died the past weekend at age 95, talked about selling. According to him that was the hardest part of this business, trying to figure out when to sell. He didn't like paying short term income tax rates and tried to hold stocks for a number of years. He commented ruefully several times about buying at $30, selling at $50 and watching the stock go to $200, etc. He recommended a new company to Graham that had wonderful prospects. Graham turned it down, saying it wasn't their kind of deal. It was Xerox, of course, but Schloss said Graham would have sold it at a double anyway and missed out on the big increase.

If it was easy, everybody would do it!
9:23 am
February 21, 2012

Graeme
Austin, Texas

Member
posts 162
2
Yeah, this is always a fun question.

For me what I do is I break up my holdings into different categories. For example, I have holdings that I bought at a good (not great) but good price, but they pay me dividends, and if they keep acting as they have for years, they should be increasing my dividends every year. I get a bit of return on the stock price increase, but a great return over many years with the dividends reinvesting. So my sell thesis on these guys is pretty firm: as in, I wont easily do it.

But then I have holdings that I would consider a deep value: selling at a deep discount to book value, or below NCAV or in a really beat up industry. These are the shares that I have a target price for: as in, I will sell when they hit that specific price. There is not a whole lot that would change my mind and make me hold on to it longer. And sometimes that target price is 50% above my purchase, 100% or even more.

So you need to judge for yourself whether the business you bought shares in is now fairly priced at it's 50% gain or if it still has room to go.
4:33 am
February 21, 2012

gstyle

Member
posts 4
1
Hi,

I was pondering the concepts of selling a value stock or holding it for longer. I understand that Ben Graham had a strict rule of selling after a 50% increase or after two years, whichever came first.

A stock brought at value brings the 50% gain, but if this stock is in a strong company with good prospects for the future, should it still be sold? At this point, do you make a decision to strictly adhere to Ben Grahams teachings or evolve to be more like Buffett in buying a good company at discount and holding it for a long time?

If the company in question was a 'cigar butt' then selling after its gain seems more obvious than for a value stock in a good company.

Thoughts / comments
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http://www.oldschoolvalue.com/blog/forum/value-investing/value-investing-sell-or-hold/#p4033

Wednesday 16 June 2010

The Hold Decision

Developing the Proper Mind-Set for Profitable Sales

The hold decision often results from an investor's bias toward a positive outlook on the future.  This subtle bias can persuade investors to take enormous personal, career and financial risks in pursuit of reward.

Investing in the equity market certainly requires a degree of optimism, but that upward bias must be supported by the fundamentals of the situation, by thoughtful personal judgement and by the judgement of suitable advisors.


It is appropriate for an investor to take some risks in search of the stock that doubles, if that risk is not too high relative to his personal tolerance.

Unfortunately, however, an investment broker makes a living by catering to this investor optimism, which supports the buy bias described above.  So investors lose billions  of dollars every year because of the optimism they bring to daily living.  Money is lost not only to fraudulent too-good-to-be-true, get-rich schemes, but also on the buying and holding sides of legitimate securities transactions.

To offset that tendency, proper buy timing and pricing can help reduce the pressure that inevitably surrounds the selling decision.  There is a natural tendency to fall victim to excitement and buy a stock when it is already hot.  Only the most disciplined of traders and investors consistently refuse to buy stocks on good news, on stories, or on excited rallies.  Instead they demonstrate the self-control to stay with their buy decisions based on their predetermined criteria.


So buying too high on a burst of optimism is the first source of optimism-induced losses for traders and investors.  But even greater damage results from holding onto positions because of excessive or unjustified optimism.  One major difficulty in overcoming this problem is that declining stocks occasionally do rally.  But an occasional burst of countertrend strength in a weak stock does its die-hard owners more harm than good.

The declining stock, by rallying - sometimes for several days in succession and occasionally by a nice point or more - provides positive feedback more recently and certainly more often.  Each time the stock turns up, a flicker of hope is kindled.  The major problem here is that even bad (declining) stocks have their good days (or weeks).

Not only does the daily price action in the market sometimes renew hope, there can be positive fundamental news as well.  A good quarterly earnings report or an optimistic brokerage recommendation can generate the renewal of optimism in the heart of an investor.  Every plus wiggle in the stock price, every time the price holds steady against a 15-point drop in the Dow and every good piece of news is a source of positive psychological feedback.  Anything that goes right is a vindication of personal judgement.


If the dominant path of the stock is downward, each and every cause for renewed optimism is actually a false signal.  In reality, those false signals should be viewed as uninvited distractions from the truth rather than as rays of hope.

When hope springs eternal, the investor must separate the facts of the situation from the fiction.  The separation process must include not only the real news background - what is actually true about the company and its industry versus what is rumour and hope - but also the psychological environment in which the investor has linked his state of mind with the company and its stock.  Guard against being trapped by a personal, renewed sense of optimism when hope springs eternal.

Using Charts

The best way for an investor to calibrate his state of mind against the market is to rely on stock price charts.  Aside from the great debate about the viability of technical analysis, a chart can be useful as an accurate road map of price movement history.

Without any experience in charting techniques, an investor can spot whether the stock is still in a downtrend or whether its price action has overcome negative momentum for the better.  Only rarely will it be true to say, "I am not sure, it seems to be right at the point of reversing."  If that is true, resolve to look again in a week and make a yes/no decision, refusing to take another time extension.

Above all, do not back into a non-decision by default through the insidious process that consultants called "analysis-paralysis."  The market keeps moving with or without an investor.  So do not wait open-endedly for just a little more news or technical confirmation.  There is never going to be a final answer or a point of total closure.  So exercise discipline:  make an evaluation and take action accordingly.

If a stock declines and then rallies, take note of a change in personal optimism level.  (How do you feel?)  Keep a daily notebook in which to write down the stock's price and the feelings that arise about it; then decide whether the revival of optimism for the stock is justified by the facts.  Bear in mind that when a declining stock has rallied back to a given price level, it feels better to the owner than when it had earlier fallen to that same price.  The more recent feedback creates hope while the earlier move produced fear.  Watch the emotional difference, even at the same price.

The price an investor pays for a stock can get in the way of prudent selling because it influences the willingness to sell in terms of both timing and price.  So buying well is important but only half of the transaction.  The investor also must exit skillfully.  Failure to buy well not only puts all the burden on possible net success on the exit execution, but it also colours the holder's thinking in ways that are damaging.

A change of mind soon after a buy is an ego embarrassment because it is an admission of error.  Taking a loss is a second ego blow.  So it is evident how the time and price of a badly made by render the selling decision more painful and difficult than it is on a big gainer.  So both the timing aspect of having bought late (recently) and the price aspect of having suffered a loss are dangers to the investor's financial health.

(The truth is that when it is time to sell before the price goes down, it is time for everyone to sell, no matter what the timing is or what the cost at entry.  But human nature seemingly demands that investors factor into the sell decision the stock's initial price.  And the less time the stock has been held, the less the investor is willing to switch mental gears and say "sell.")

What should determine the decision is whether the stock seems likely to go down from here and now; if it does, it should be sold as soon as possible.  The central question that should decide the hold/sell dilemma is "Would I buy this stock today?"  Many investors fail to ask that question at all.

There is no denying that buying better helps most investors cash in more effectively when the right time comes.  Most buying mistakes (aside from acquiring inflated "hot" new issues and penny stocks) occur not in buying bad stocks but in buying mediocre stocks too late - again, because investors tend to be crowd followers.  They wait for confirmation because they need courage.  They are most ready to jump in when the market has already become overbought.

If a stock is held only because of perceived positive potentials for the whole market, it should be sold.  "Would I buy today?"  A similarly revealing question is whether an investor would sell it here if he had bought better.  If there is even a hint of an affirmative answer, he must recognise that cashing in is the right thing to do.

Tuesday 1 June 2010

Panic-Resilient Stocks

There are several groups of stocks that tend to act well in a post panic environment, especially if the crash itself drives prices to incredible levels.  Of course, the more unusual the values created, the quicker is the upside correction.  Some of the groups most likely to snap back are:
  1. Recession-resistant industries (foods, drugs, utilities).
  2. Noncyclical blue chips driven well down (oils).
  3. Big names with corporate staying power (AT&T, Exxon, General Electric and General Motors).
  4. Fortune 100 and similar companies with good yields.
  5. Trade-down concepts like low-cost restaurants and discount retailers (recession "beneficiaries").
  6. Companies with low P/Es or low price/cash flow ratios not in the first list here.
  7. Companies selling below book value and with positive earnings estimates for the coming year (implying credibly sustainable book values).
  8. Companies with low debt/equity ratios.
  9. Unleveraged closed-end, non-junk bond funds.
  10. Panic-trigger beneficiaries (e.g., oil-service and insulation stocks after OPEC raised oil prices in 1973).
    All of these stocks are recession-resistant or perceived as among the most likely to survive hard times.  They retain market sponsorship and regain enthusiastic buyers soonest.  Related positively to the trigger event, they have high visibility because investors remember the concept vividly.

    It is important to make hold/sell calls in the light of prevailing market expectation and not personal judgement of what may happen.  If the (correct) bet is no recession, the reward is smaller and slower than if the (correct) bet is market expectation of a recession (whether it comes or not).  The investor must subject his ego to the realities of the emotional climate.  It is better to be rich than to be vindicated slowly.



    Stocks that don't fare well in a post-crash environment

    Stocks that don't fare well in a post-crash environment

    Stocks that tend to be sub-par performers in a post-crash environment are:
    1. OTC issues
    2. Low-priced stocks
    3. Small total-capitalization issues
    4. Thinly-traded, under- or non-covered stocks
    5. Industry laggards
    6. Recession-sensitive by industry
    7. Discredited groups
    8. Panic-trigger related groups

    Because of fear, nervousness and lack of speculative appetite after a crash or panic, the first five groups (some of which overlap) lack sponsorship.  

    In addition, because market panics generate immediate scare headlines in the media, there is talk of recession and parallels drawn with 1929.  So recession-sensitive stocks by industry do not bounce back much for a period of time.

    There may, in fact, be no recession following the market's downmove (as in 1988), but perception and expectation drive prices near-term more than facts do.  So cyclicals like steels, chemicals, paper and capital-good producers are not solid choices for participating in the bounce.  Similarly, vacation and luxury stocks fare poorly.

    The discredited groups vary from one market period to another.  Their identity depends on what was in the headlines in recent months.

    • Basic industry stocks were taboo in the early 1980s, known as the 'rust-belt' period.  
    • High-tech stocks suffered through a private, one-industry recession in the mid-1980s.  
    • Banks were whipping boys in the early era of bad third-world loans.  
    • Most recently, savings and loans have been in the doghouse due to bailout legislation and highly visible failures and scandals.

    Again in a longer-term perspective, the facts may prove that the fear about leading companies in discredited groups was unfounded.  But in the short term after a crash there are few who have the courage to sponsor tarnished-image stocks with either money or written advice.  Such issues are early recovery laggards.

    The final category should be off the hold list for similar reasons.  Sometimes there is an industry or category of stocks related to the news that triggers the panic selling.  

    • In 1962, it was steel stocks sensitive to pricing confrontation with the Kennedy administration.  
    • Brokerage stocks would have been poor choices to hold after the 1987 crash because of all the controversy surrounding program trading.  
    • The 1989 crash was triggered by the collapse of the propose buyout of UAL, Inc., so airlines and other proposed leveraged buyout candidates were identifiable as the trigger-related group at that time.

    Weathering a Panic

    The central concept applicable to the 'buy and hold until fundamental changes' investor is the occasional need to play when it is painful.  But this concept specifically and only means to hold stocks that are being affected just by the overwhelming negative psychological forces that occasionally cause selling routs or panics in the whole market.

    To put this very important limiting caveat another way:  when a crash or panic occurs, stocks should be 

    • held only if they are going down because of market factors and 
    • not if they are being affected by company factors.  
    This should relate to only a few issues, however, because investors following a disciplined selling methodology (see related article below) already should have weeded out the bad performers and taken profits on the stellar performers well before a bear market reaches climax proportions.

    So when appropriate selling has left an investor with only a few, high quality stocks, he can and should hold onto the gems and play through the difficult experience of a panic or crash.  He will be holding only a relatively small portfolio (having followed the other cashing-in suggestions well before the bottom nears), so his level of pain will be no worse than moderate.  And his cash holdings will give emotional comfort and provide the resources for acquiring stocks advantageously when prices get really low.

    Some investors may see a contradiction in this advice because they were usually counseled that avoiding losses is the first priority and the best reason for selling.  But taking a short-term dose of paper losses in a crash - by holding quality issues - is a lesser risk than selling out during the fury, and hoping to have the courage and good executions to get back in at lower prices shortly afterward.

    If an investor is down to just a few core holdings anyway, he is better advised to tough it out.   The very experience of playing in pain through a temporary crash (think of the October 1987 and October 1989 bashings) is of enormous instructional value despite the modest monetary cost involved.  The process of crisis-thinking and the need to make wrenching decisions that prove valid in short order will serve him well for the rest of his investment career.

    Once he has successfully navigated the worst of the choppy investment seas, he will have learned survival lessons and will have internalized feelings and taken in an experience that will be forever his.  That experience deepens his understanding of the way the market works.  Probably most of all, having won at a different game, he develops the wisdom and courage to succeed in similar circumstances in the future.  And that provides the opportunity to make big profits in the handful of similar opportunities that will occur throughout the rest of his investing career.  He will know beyond any shadow of a doubt that the contrarian philosophy of investing works.

    When caught in a panic, the central question is whether capitalism in the United States and major Western democracies will continue to function after the panic ends.  If the answer is yes, then there is no reason to sell at foolish levels.  In fact, the only rational thing to do is take courage and make buys.  Being gutsy enough to act on the contrarian test - refusing to sell good stocks cheap because Wall Street and Main Street have lost faith for a few days - insures appropriate selling.  It is difficult to buy in a panic.  Those who can do so are rational enough to sell with discipline as highs approach.

    There is one more qualifier on whether to hold or sell after a panic has passed.  Once the panic subsides, there is a lift in the market.  But the effect is significantly different on various kinds of stocks.

    • For some issues, there is a sharp snap-back rally; 
    • for others, there is very little improvement.  
    Just as it is not advisable to sell into the panic, it is prudent to reassess positions after the selling frenzy has subsided and the lift in prices has begun.

    The object, as always, is to decide what to sell and what to hold.  Selling should not be urgent because pre-bear-phase tactics will have raised a lot of cash, so there's no need to sell to raise cash for margin calls or buying.  But because the goal is always to maximise return on capital and to take advantage of the time value of money, look closely at what to hold and what to sell after the panic has cleared.


    Related:

    To hold or to sell? Holding should occur only if no tests for selling are failed.

    To hold or to sell? Holding should occur only if no tests for selling are failed.

    To hold or to sell?

    In any discussion of holding versus selling stocks, the circumstances under which it is best to sell should be outlined first.  Holding should occur only if no tests for selling are failed.

    The company-related reasons to sell are:

    1. Sell if the news cannot get any better.
    2. Sell if things did not go as planned.
    3. Sell when the broker's advice goes from 'buy' to 'hold.'
    4. Sell if company fundamentals are getting sick.
    5. Sell on the rebound in the aftermath of material, unexpected or discrete bad news.
    6. Sell in certain cases when expected news is delayed.


    The market-action reasons to sell are:

    1. Sell when the stock reaches the target.
    2. Sell on an unsustainable upward price spike on big volume.
    3. Sell when a portfolio shows all gains.
    4. Sell if the stock is lazy money and likely to stay that way.
    5. Sell using above-market limit orders, letting the market come to the investor.
    6. Sell with a stop-loss order, but never remove or lower it.


    Investor-related reasons to sell are:

    1. Sell if the stock would not be bought again today.
    2. Sell after gloating or counting the chips.
    3. Sell rather than hope against hope for a 'maybe' bailout.
    4. Sell and step aside on a personal losing streak.


    If an investor sells stocks in a disciplined manner using the signal above, he is likely to end up with a good deal of cash before the market moves into a bear cycle.  Relatively few of his holdings will fail to hit one of  the 16 triggers noted in those lists above.  Those stocks that do survive will tend to be high-quality growth issues that have continued to perform fundamentally and have not run up to unreasonable price levels.  Some experts refer to these as core holdings or 'businessman's risk' foundation stocks.  They are stocks that have given consistent indications they can be held through good and bad in the market.

    All other stocks will have become sales before a panic bottom because:

    1. They worked as planned.
    2. They acted too well for a brief period of time.
    3. They got unreasonably priced.
    4. They were wasting the time value of money by going nowhere.
    5. They developed significant fundamental problems. 


    Very few stocks can escape all those screens for a long period.  So if an investor is cashing in as prescribed and if his buying discipline rejects new positions when valuations get too pricey, he ends up still holding very few stocks as the market get toppy.  That, of course, protects his capital.

    There are two major price-driving forces:

    • fundamentals (which control the long term) and 
    • psychology (which rules the short and medium term).


    The fundamental and psychological factors affect stocks in both directions.  And as an overlay, understand that they can affect a stock either

    • directly (because of the company behind the stock itself) or
    • indirectly (because the market trend is so strong that virtually no stocks can buck it).  
    However, the indirect effect is much stronger on the downside than on the upside:  fear is a more powerful driver than greed.

    Friday 22 January 2010

    Why Selling feels Uncomfortable?

    Selling requires of us a significant change in our thinking - indeed a complete reversal! 

    When we bought that stock, its prospects were wonderful, and it represented value and opportunity.  Now, whether our investment has since done well or not, to sell requires closing down hope and perhaps admitting defeat.  And it is possible that our defeat may have been created by faulty initial thinking, meaning we can place no blame externally since we were actually wrong all along.  Not a realiszation we savour.

    Buying involves the opening o f possibilities of great things.  Buying represents open-endedness; continued holding maintains such hope for gain and pleasure (or, when we have a paper loss, hope for recovery and the righting of a temporary wrong).  Selling carries a finality with it because, by definition, it closes the book or ends the game and establishes a final score.  We prefer to have our options open rather than foreclosed, to retain chances for improvement and betterment rather than to know that the verdict is sealed and no chance for change exists.  We have great difficulty coming to closure since it cuts off further possibiiities; it ends hope for any better outcome.  Closure includes such experiences as
    • cleaning out great grandmother's attic;
    • graduating and leaving school and friends;
    • acknowledging a failed marriage by concluding a divorce;
    • burying a dear friend or loved one;
    • seeing winter come;
    • leaving an employer and valued colleagues;
    • retiring and therefore wrapping up business. 
    Those are heavy and sad passages, so we are predisposed to resist voluntarily creating any closure expereinces that we have power to avoid.  Holding does exactly that.

    Holding keeps our options open, while selling clearly brings closure and finality.  (With surprising myopia, we ignore the fact that once we sell a stock we can just as easily repurchase it.  Viewing repurchase as a very real antidote to our revulsion against closure, however, raise visions of again going through that agonising process of reversing our opinion by 180 degrees, which is painful for all the reasons noted above.) 
    • So we hold rather than sell because, at the very least, holding postpones coming to closure. 
    • Many a bad stock is held (into an uncertain yet not hopeless future) with palpable likelihood of further financial loss because the (presently avoidable) emotional cost of coming to closure is perceived as so heavy. 
    • Investors pay in dollar losses to avoid emotional pain from a closure process; often, as losses get worse, they will later need to pay a higher price in both lost dollars and eventual pain by imposing self-punishement over major mistakes. 
    The closure aspect of selling is a powerful deterrent, one requiring both strong will and courage to overcome.

    Why Holding Feels Right - Understanding the Psychology underlying this

    Understanding the subtle but strong psychological impediments against selling

    At a most obvious level, making profit represents pleasure, while suffering a loss equates to feeling pain.

    Let us attempt to understand the deeper layer of forces that dispose us to certain attitudes and behaviours springing from our subconscious pain-avoidance and comfort-seeking tendencies.

    When we own a particular stock, inaction (holding) keeps us in or certainly closer to a place of comfort than does taking action to change our circumstances (selling).  Holding onto a friend keeps us close to our past, to memories and feelings we cherish.  Many continue to hold stock in companies whose fortunes peaked years or even decades ago.  Logic alone cannot seem to explain why they resist selling despite obviously dim prospects for recovery or gain. 
    • Maybe grandfather worked for the company, or we reside in a town where it supported many families or sponsored the softball team. 
    • Perhaps ages ago we made a profit, or at least had a good paper profit for a while in this stock. 
    • Or our parents always spoke well of the company or
    • confided they had made a decent sum in its shares at one time. 
    Thus, nostalgic positive feelings surround it and we find it very difficult to end our association.

    Our positive associations with a particular stock create a bonded feeling. 
    • We have made a good profit on an overall basis and while the annualised return may be unspectacular, a gain is surely better than a loss and the total dollar or point profit feels pleasant.  So this stock is our friend. 
    • Held for a number of years now, it has been virtually adopted as a family member.  Thus, our primary inclination is to not severe such ties by terminating this comfortable relationship. 

    Why end this thing, we think at an unconscious and perhaps also at a conscious level.  Living with, rather than without, that stock represents staying in a comfort zone.

    Even though the company's fortunes may now have faltered, choosing to sell its stock represents adopting a 180-degree opposite stance.  Issuing that order to liquidate means that we once thought was correct now is no longer so in our minds. 
    • This company is no longer under priced, or its prospects or management quality are not what we earlier imagined or expected. 
    • Or perhaps we have given up on its price/earnings ratio growing as we had earlier envisioned.

    To say sell means that either
    • what we once thought was right is no longer so and/or
    • that maybe we have already been on the wrong side of the market for some time and are now admitting a change in opinion is warranted. 
    Either way, selling represents admitting we now believe what we earlier thought is no longer true.  Most of us have great difficulty acknowledging that we were wrong. 

    If you place a very strong value on reputation or esteem in life, the reversal of position inherent in selling is likely to be an especially difficult battle zone for your ego and your comfort.  This can be a special problem for professionals such as doctors, attorneys, and others looked up to.  Reversing a position is made even more difficult if we have publicly or strongly espoused it.  This is a very important reason for keeping our investment holdings secret:  reversing ourselves and selling then at least involves no loss of face with others who knew our prior opinion.