Hitesh portfolio

Exiting is the most difficult part of the stock investment.

Let us take an example of Large Cap ITC.
Before implementation of GST in 2017, ITC was trading close to 200 for few months in 2014-15-16, and before GST tax rate was finalized, it was mis priced at close to 340 (In July or August 2017). At that time, Mr. Market got GST rate completely wrong for Cigarette business and by the end of 2017, ITC corrected to 240.
In and After Feb 2020, it was available below 200 or 160 as well.

The investor who sold in July 2017 at 340 and re-entered again in Feb-Mar 2020, would have made more money than the Investor who kept on holding from 2015 to 2023.

Some times, it makes sense to exit Overvalued stock and Re-invest after few years and again sell after few years.

Alternatively, in many cases, like Small and Mid Caps, selling could be difficult because some times after selling it may go further up 2-3 times as well, due to mis pricing by Mr. Market.

Hence, an investor has to decide his/her expectations from the stock, and Build Sell framework accordingly.

If you are satisfied with 20% CAGR returns at the Portfolio level, then you can decide your Sell framework accordingly rather than taking the risk of holding the stock beyond your comfort level. Eventually CAGR returns at the portfolio level are more important than individual stock level in the long term.