IFB77: A Stock Selling Theory: Three Strikes and You’re Out

 
Dave:                                    00:35                     Welcome to episode 77 tonight. Andrew and I are going to talk about a stock selling theory. Three strikes. You’re out. Andrew has some thoughts on selling a stock and you wanted to share them with you, so we’re going to go ahead and start us off. Andrew, why don’t you tell us your ideas.
Andrew:                              00:53                     Should I really? Does anybody want to hear them? I think they do. Okay. I will. I’m God this cold email today. I want us to share it because it’s inspiring. A email from Renee says,
Dave:                                    01:08                     I just got into investing maybe 10 days ago and they’re already listened to around 10 podcast. Keep up the good work.
Dave:                                    01:14                     Those are the kinds of things I love to hear. It fires me up a 10 day brand new investor. That might be. That might break our record as far as recorded record of being public. I don’t know if some of these beaten that. That’s pretty cool. It is. So keep those coming. Uh, that fires me up to get me a recording on an episode like today.
Andrew:                              01:40                     But you know, we want to talk about selling a. We talked previously in episode 65 a. If you go back and listen to the archives, I talked about how my approach evolved a bit. When I went back, I looked back at the history of some of the buys and sells I made through the Eli, their portfolio and Ivy. I used to break up the portfolio into two portions. I had the regular portion and the dividend fortress portion. I still have those two sections kinda a segregated off, but I had trailing stops on the regular portion. And in episode 65 I talked about why I no longer use trailing stops.
Andrew:                              02:33                     Kind of a cliff notes on that was I found that because the way I picked stocks is very, very conservative, very, very much so. Margin of safety, emphasis on the safety. A lot of these companies with strong balance sheets, maybe not explosive growth that leads the market, but Kinda just plugs along slowly but surely and quietly creating profits and with them is that grow over time and trading at prices that make them not popular. Right? So already by that, by that kind of definition, they’re not going to have momentum at least a start. And so what I found, looking back at some of the stock picks I had, I had several where if I would have not, you know, if I would have not applied the trailing stop if I were the let the stock run, than I would have actually had much higher performance. And that was a pretty consistent trend I noticed through several years of data. So, uh, coming up on, oh,