How I Decide When to Sell (My Exact Rules)

Buying is easy.

Selling is where most investors fail.

After 9 years in the market, my biggest mistakes were not about what I bought—but:

    - what I didn’t sell
    - when I didn’t sell
    - why I didn’t sell

This article is the result of those mistakes.

These are my exact rules from now on.

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The Problem I Had

Let’s be direct.

I held:

• positions down -80%, -90%, even -100%

• because I “believed”

• because I didn’t want to realize losses

At the same time:

     I sometimes sold winners too early

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The result:

• capital stuck in dead positions

• missed better opportunities

• inconsistent performance

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The Core Principle

Everything I do now comes from this:

Selling is not emotional. It’s structural.

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Rule #1 — Hard Loss Cut (No Exceptions)

    - If a position drops -30% to -40% from my entry:

     I sell.

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Why:

• protects capital

• prevents catastrophic losses

• frees money for better opportunities

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What I learned:

Holding a -90% position is not patience.

     It’s lack of discipline

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Rule #2 — Thesis Broken = Immediate Sell

If the original reason I bought the stock is no longer valid:

     I exit immediately

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Examples:

• business model deteriorates

• political/regulatory environment changes negatively

• debt becomes unsustainable

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     No waiting. No hoping.

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Rule #3 — Take Profits Systematically

I don’t “wait forever” anymore.

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My approach:

• At +50% to +100% gain → consider partial sell

• At +100%+ → take profits or rebalance

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Why:

• locks in gains

• reduces risk

• avoids round-trips (profit → loss)

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Example from my portfolio:

• Magyar Telekom

• ZWACK Unicum

These became oversized winners.

     Now I trim, not blindly hold.

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Rule #4 — Position Size Control

If one position becomes too large:

     I reduce it

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Limit:

     No single stock should dominate my portfolio

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Why:

• protects against single-company risk

• keeps portfolio balanced

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Rule #5 — Reallocation Rule

Every sell must answer:

     “Where is this capital going next?”

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If I don’t have a better opportunity:

     I don’t rush the sell (except risk cases)

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This connects to:

• ETF accumulation

• bond allocation

• structured portfolio strategy

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Rule #6 — Tax-Aware Selling

I use losses strategically.

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Example:

• realized losses (like Greenlane)

• offset gains (like Magyar Telekom, Zwack)

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     This improves net returns

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Important:

Not all losses are usable:

• some illiquid or delisted stocks can’t be easily sold

• execution matters

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Rule #7 — No Emotional Decisions

This is the hardest rule.

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I don’t:

• hold because I “like the company”

• sell because I’m scared

• chase hype

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     Every sell must follow a rule

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Rule #8 — Portfolio First, Not Stock First

Before, I thought:

     “Is this stock good?”

Now I think:

     “Does this position fit my portfolio?”

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This changes everything.

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Real Example From My Recent Moves

• Sold part of Magyar Telekom → locked profit

• Sold ZWACK Unicum (partial) → realized gains

• Exiting legacy losses → cleaning portfolio

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     This is the system in action

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Connection to the Bigger Strategy

This selling strategy supports:

• ETF-based core

• reduced volatility

• scalable capital allocation

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And connects directly to:

    - Article #2 (Hungarian election)
    - Article #5 (allocation)
    - Article #7 (next investments)

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The Real Lesson

After 9 years:

You don’t lose money because you’re wrong.
You lose money because you don’t react when you are wrong.

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What Comes Next

Next article:

    How I Decide What to Buy (My Exact Criteria)

• valuation filters

• macro triggers

• entry timing

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Final Thought

Buying creates opportunity.

Selling determines results.

And now—for the first time—
my selling is under control.