Peter Lynch - When to Sell Stocks? | Growing a Small Stock Account
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What’s Up, Everybody! MR. ZERO to INFINITY is back for Episode 64! Sorry for the long break! Peter Lynch - When to Sell Stocks? | Growing a Small Stock Account | Add on Instagram: MrZEROtoINFINITY
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Peter Lynch - When to Sell Stocks? | Growing a Small Stock Account
When to Sell Stocks? Let’s listen in to Peter Lynch explain when he thinks it’s time to sell stocks.
What’s up everybody! Mr. Zero to Infinity says hello! For this episode I’ll be applying Peter Lynch’s selling principles to my own YouTube portfolio and then I’ll go over a few of my investing goals as we enter the year, 2024.
So at the end of my last episode, back in May of 2021, it’s been quite some time!, there were 16 stocks in my YouTube stock portfolio. As Peter Lynch explained sometimes you have to drop out of the game completely if a stock’s story changes and there’s a better story to buy. I dropped out of the game altogether in all of my stocks except 1 stock, Shift4 Payments, and a sizable cash position. The reason I sold is because I believe Shift4 Payments has a better story than holding on to the other 15 stocks. I also wanted to increase my cash position so I’m ready to enter new stock positions as the months tick forward.
My Goals:
Number 1, buy stocks that will grow the portfolio as quickly as possible within a 2-3+ year time horizon. Give enough time for a bull thesis to play out.
Number 2, following Peter Lynch’s selling rules, if stock holding “a” has a better story than stock “b”, buy more of stock “a” and sell stock “b”. This means I can sell a stock at anytime. Generally, I believe there are two reasons to sell an investment: 1) I recognize my initial bull thesis is wrong (in that case sell out as quick as possible), 2) I have a significantly higher returning opportunity to redeploy the capital into another stock (for this reason, sell-down to fund the new investment)
Number 3, keep the stock portfolio under 5-10 different stocks. This means I will have a high concentration in just a few stocks. Make concentrated bets in high conviction plays. It's tough to identify a 10-bagger, so splitting my capital to have 5-10 shots on goal is helpful.
Number 4, since perfect market timing is impossible, dollar cost average my stock positions. As time goes by, have a goal to sell off the higher cost basis for a small profit so I can let the lower cost basis compound for better returns.
Number 5, focus on small caps where the markets are more inefficient. There is less analyst coverage so less information flow. I have the chance to find prices more below value. Small caps have more opportunity to find mis-priced stocks.
There you have it, 5 simple goals as we move forward into the year. Feel free to tell me your investing goals in the comments section.
Let’s end it there!
Let’s keep building from ZERO to INFINITY! 🚀📈
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DISCLAIMER: This video is for entertainment and informational purposes only. I am NOT a financial advisor and anything discussed on this Youtube Channel should NOT be viewed as investment advice. All ideas and opinions presented in this episode are mine and mine alone. You should never take any of this information as guidance for buying or selling any type of investment or security. Always do your own research prior to making any investments. Do not assume any facts and numbers in this video are accurate. Read the disclaimer in the video fully.
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