Buying is Easy, Selling is Hard
It's all easy in CAPS, but in real life knowing when to sell is a lot harder than knowing what to buy. If I make a mistake buying I can get out of it before I lose too much money. If I sell a stock that then proceeds to soar, all I can do is cry over the money I woulda shoulda made. It's a lot easier to fix a bad buy than it is to fix a bad sell.
In CAPS, I just sell anything that underperforms by 15% or more, I might buy it back at some point but after a 15% drop I would need almost 25% outperformance just to turn it into a CAPS winner and the odds of that are always going to be really poor. Otherwise I sell stocks that are winners on CAPS (5% outperformance or more) once my analysis shows that they should be rated "hold" or lower. Take the points and run.
But in real life I struggle with "hold"-rated stocks that haven't done much for me. Do I sell and buy something from my "strong buy" list or do I hold? This is really where the money is made or lost. So far my decisions have been right more than 50% of the time, but not by much. But I've "lost" a lot more money by selling stocks that I shouldn't have sold than I've lost by buying stocks I shouldn't have bought.
This week's "hot tips" (real-life purchases): NTT, DLA, UPMKY