Art of selling is indeed difficult to master. @desaidhwanil has done a very good presentation on selling decisions and it is here →
In a nutshell, following things make sense for selling →
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When initial investment thesis has changed or no longer valid or incorrect. e.g. If you bought a story as undervalued bet and valuation has caught up, it might be good time to sell. If your business thesis (growth, margin expansion, dividend etc.) is not working out (irrespective of stock price) for decent amount of time period it is time to sell.
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If you have found a better story where risk adjusted expected return is much higher than one of the existing stories, it might be time to sell.
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For an investment that started in your portfolio as AB (attractive business), it might be time to sell if competitive position has deteriorated or business quality is going down (declining return ratios, more capital requirement, management mis-actions etc) or balance sheet has worsened (debt, equity dilution etc.) or if you think industry as an whole is going through bad phase for long periods (3 years+).
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Another thing I tend to do is sell AS (Attractive Securities) when overall market is in very bullish territory even if my targets are not fully achieved e.g. when Nifty, BSE small/mid cap index PEs are around (long term average + 3*standard deviation) (PE of 25+), I tend to sell my AS.
Hope this help.
Best Regards,
Rupesh