When to Sell Your Stocks? (It Will Save You From Losing Thousands of Euros)

When to Sell Your Stocks? (It Will Save You From Losing Thousands of Euros)

La Pizarra de Andrés 7/27/2025

Welcome to Andrés's Whiteboard! In this article, based on my latest video, I’ll share my best advice on when to sell your stocks. Knowing when to sell is just as important as knowing when to buy. Today, we’ll dive deep into this topic, exploring when not to sell a stock and when it is advisable to do so.

What You Will Learn

  • How to know when to sell a stock
  • The best tricks for selling your stocks at a good valuation
  • My step-by-step method for correctly selling stocks
  • How to develop your own selling strategy without any sales pitch

For additional content and resources, connect with me on my website, newsletter, and social media platforms.

Introduction

Many of you have asked me: "Andrés, I bought a stock, but I have no idea when to sell it." This article summarizes the common scenarios shareholders face with the companies they own and presents what I believe is a sound strategy to know when to sell.

Since you already know most companies in my portfolio, I’ll accompany the explanations with real examples from my own holdings.

First Question: How Much Do You Know About the Company?

This is the cornerstone question before deciding when-or even if-you should sell.

Categorizing Knowledge of the Company

There are three levels of knowledge you can have about a company you own:

  1. Little knowledge
  2. Some knowledge
  3. Extensive knowledge

Identify where you fall because your selling strategy depends heavily on this.

1. When You Know Little About the Company

This is the least recommended scenario.

  • You have two options here:
    • Sell immediately because holding shares of companies you barely understand doesn’t make much sense.
    • Or hold speculatively, but only with a very small amount of money.

In this case, your investment is a bet based on guesswork, not knowledge. Speculation means you believe the stock price will rise, but you don’t really understand the business behind it.

My Example: OCLO and STS

  • Both companies are not profitable yet and are expensive in valuation.
  • I have a very limited understanding of their business models.
  • Despite that, both have returned over 100% gains.
  • I hold a very small part of my portfolio in these (around 1% per company in a nearly €100,000 portfolio).
  • My strategy:
    • I could sell now and take profits, or
    • I might sell part of the investment to recover initial capital, keeping some shares for potential further upside.

Key Advice for Little Knowledge Holdings

  • Don’t hold large positions in companies you don’t really understand.
  • If you want to speculate, do it with small amounts only.
  • Periodically consider taking profits or cutting losses.
  • Always remember this is essentially a gamble, so treat it accordingly.

2. When You Know Some About the Company

If you have decent knowledge, the first key question is:

Do you have a price target?

You should determine:

  • At which price point do you consider the stock fully valued or too expensive?
  • When reaching this target, you should sell.

How to Find a Price Target?

If you don’t know one already:

  • Use analyst consensus on platforms like Yahoo Finance or Google by searching "Analyst Consensus <Company Name>".
  • See what professional analysts think the fair value of the stock is.

If your investment thesis was based on the stock being undervalued, selling once it reaches analysts’ target prices makes sense.

My Examples: Gestamp, Nike, and Alibaba (BABA)

  • Gestamp and Nike:
    Both had clear targets I used for selling portions at reasonable gains.

  • Alibaba (BABA):
    We understand the company well, know the challenges in the Chinese market, and estimate a price target around $150–160.
    If Alibaba reaches this level, I plan to sell part or all, taking profits of 60-70%.

3. When You Know the Company Very Well

If you have thorough knowledge of the business, your strategy will be more nuanced.

Ask Yourself: Why Did You Buy This Stock?

Typically, the reasons fall into two categories:

a) Buy and Hold Strategy

  • You believe you have better insights than the market and a deep understanding of the future prospects.
  • This is a long-term strategy with no fixed price target; you keep the stock while the company continues to meet its targets.

Examples from my portfolio:

  • Nextil and Amper, where I have spoken directly with CEOs and followed their strategic plans. Both are in strong uptrends and expected to continue growing.

b) Buy for a Catalyst

  • You hold the stock expecting a specific upcoming event to generate a strong price increase.
  • This is not a traditional value investment; it's a bet on an event that may or may not happen.

Example:

  • Tulow: The company has debt issues but positive earnings. If it successfully refinances by year-end, the stock could soar. I bought it for this catalyst, not as a forever holding.

Other examples could be a pharmaceutical company pending drug approval or Tesla holding for future innovations like robotaxis.

Selling in This Case

  • If the catalyst happens, consider selling and taking profits.
  • If it doesn’t happen, expect losses and consider exiting the position.

Summary: My Selling Philosophy by Level of Knowledge

Level of Knowledge Selling Strategy
Little knowledge Sell immediately or hold very small amounts; treat as speculation
Some knowledge Set a price target (own or consensus analysts’) and sell at or near that level
Extensive knowledge Hold long term if fundamentals remain; sell after catalysts or if value is lost

Final Thoughts

  • I generally recommend buying solid companies and holding them for a long time.
  • Even with well-known companies, once their valuation stops being attractive, selling and reallocating to better opportunities is wise.
  • Different knowledge levels require different plans.
  • The key is to know why you own a stock and when you plan to sell before making the purchase.

If you found this useful or have questions, please leave a comment. I’ll see you in the next video/article!

Disclaimer

All content shared here represents personal analysis and opinions and is not investment advice. Always do your own research before investing. I am not responsible for any financial losses arising from actions taken based on this information.

Connect With Me

Explore these channels for more insights on financial freedom, equity income, investing, and stock market strategies.

#financialfreedom #equityincome #investment #stocks #investing

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