Selling too early isn’t a curse

On Friday, shares in U.S. listed Docusign (DOCU) slumped 42% to close at $135 per share.

This prompts a revisitation of the company’s prospects.

Client portfolio’s have owned that stock before. Happily, those positions were sold at $240 in September 2020 (almost 15 months ago).

I have made reference to these selling decisions (and other stocks) in this post, dated March 19, 2021.

In a continuing post mortem of investment decisions, the charts below highlight where I’ve sold particular stocks and compare it to their latest closing prices.

While I may be critical for ‘selling too early’, I am sanguine in sticking to my discipline and reasoning behind those selling decisions. It’s not a case of vindication.

Sometimes the decision to sell can simply mean that I can’t convince myself to buy more of a stock at their higher, improved prices or more to the point, I’m not comfortable taking on current or more risk by continuing to hold it. This is when you hear the term, ‘preservation of capital’ being used.

I guess that this also falls into the category of ‘catching the fat part of the trade’.

You could also say that there does come a time to sell. The ‘set and forget’ trade is fraught with danger as the ‘forget’ portion possibly suggests that you don’t need to monitor or check your investments.

Incidentally, the linked post mentioned Alphabet (Google) stock as a position that I will not be selling at that time.

Its chart is also included below. I am still holding GOOGL.

December 6, 2021

by Rob Zdravevski

rob@karriasset.com.au