A Framework for Selling a Stock

A Framework for Selling a Stock
Written by Greg Speicher on October 28, 2010

Determining a good strategy for when to sell a stock is both important and difficult. In simple terms, your returns are going to come from two primary sources:

1) the reappraisal of an undervalued holding to its intrinsic value and
2) growth in intrinsic value.

Many investors sell their holdings if the price appreciates to fair value. Others, like Buffett, Russo, Greenberg, etc. hold their stocks for the long-term and look for gains from growth in intrinsic value.

Both of these approaches work and have generated a great deal of wealth.

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