I've been doing an analysis of SP movements after I sell a stock and have come up with some very inconclusive evidence. I know Tech/a likes to say 'let the profits ride' but as far as my transactions go, it hasn't always been the case.
The analysis began after I sold my VSL shares on 4/10 for $1.54 and within a month they are now $1.77. Very annoying! Should have let the profits ride.
My worst case of not letting profits ride was selling FKP after it doubled in a year for $2.88 in March 04. The current share price is $4.62. Other examples are BIL (sold at $6.07, now $8.33) and SMS (sold at $12.15, now $16.70).
However, many of the stocks that I sold that had doubled in a short period (i.e. less than a year), did not continue on such a run. I sold TEN for $4.13 in Nov 04 and is now $3.38. I also sold VWD for $1.43 in Sept 03 after it doubled in a year and is now $1.40.
Some of the stocks that I sold after they tanked have since recovered. In particular CRG (bought at 10.33, sold at 9.80, now 10.32) and HOM (bought at 65c, sold at 33c, now 44c).
I guess I can take comfort in the fact that my actual portfolio has outperformed this post-sale portfolio, but i'm still struggling with exit points and how much do you 'let profits ride'. Anyone got some examples of set exit points?