regarding keeping cash I tend to be fully invested most of the times. that was not the case a few quarters earlier. Regarding selling its usually a comparision between the existing idea which either has not played out or has reached obscenely high valuations or maybe some other reason.
About the bigger picture, sometimes in the path of a company having a great foreseeable future, there will be temporary hiccups. e.g I have seen such concerns happening a atleast a couple of times a year in Gruh and Page and Ajanta… These are to do with some minor regulatory issue as in case of gruh or some minor concern in case of page or something similar. Now for multi year stories these should not weigh too much. In Ajanta there were some concern s about suppy of antimalarials suffering due to some or other issue, some tax concern some time back and so on. But these things dont affect the longer term bigger picture which is that the company seemed at that point of time on a strong growth path as comaped to peers.
Good and mediocre companies — I think we have full threads on business quality. So I dont feel the need to elaborate.
Sitting on cash as I mentioned is difficult. If the existing ideas are more attractive even at current prices as compared to new ideas then of course it makes sense to buy them. Provided the portfolio balance is not skewed.
Regarding change in perception, it is not to do with only one thing or one parameter. And many a times it is not to do with PE levels as well. But these usually are seen while observing market reactions to some stocks having very good or very bad news. e.g during last quarterly results, ipca stock tanked initially and then recovered to close near the highs of the day and formed what is in technical terms called a daily reversal bar pattern. this is just one example. But sometimes we can see a list of negative news being ignored and then that should make us sit up and take notice and think more about that. Same thing could happen other way round as well. A stock not reacting positively to a slew of positive news should also alert us.
About spinoffs, its one’s own call when one buys whether after or before the actual demerger. There is not one size fits all rule here as in investing. One has to be flexible and adapt to different periods of market.