I wanted to know if this is a wise or good practice to keep Profit shares till eternity i.e. shares remaining after you cash out your desired capital ?
+ve side of this approach is you can still catch some of the future growth in stock in case it runs after you cash out your desired capital.
-ve side is these stocks clutter your portfolio
For example consider any stock which has run up to be say 5X for you and you cash out say majority of your holdings and then same stock runs further to become say 20X
If business is run by ablr managment and is proactive and growth is expected, why will one sale.
To be honest, once i reach a decent corpus via investment, i plan not to sale existing stock meeting above criterion and churn 30% of portfolio. Instead current churn of 100%.
But million dollar question is do i have such stocks in my portfolio.
For me…if the co is good enough to buy 1 share…it’s good enough to buy 100000.
However, if I ever followed the foc concept, I would remove the free shares from my tracking sheet and not even see numbers. The day I needed cash for something…I would just hand over the list to my dealer and say sell irrespective of price.
Agree…but…consider this…say you are expecting certain growth rate and price x based on that valuation…now stocks zooms past that x price and you are not sure why its going beyond x… (may be just momentum or Mr. Market being crazy)…i mean you have no visibility to co-relate the valuation then you take out your capital (may be some additional profit as well) and whatever holding is there is absolutely free…and you would certainly not care if it becomes zero…(and many a times it does :))
that’s my query… i have too many foc shares though quantity is very small…and though I do not track them but still they clutter the view when you go to broker’s portal…that’s why asking …how you/others deal with it
.