Would you sell a stock that went up 50% in 3 months?

Question

It's a good solid 140 year old company with a great future but no tangable reason for shooting up like this. I'm afraid it'll take a tumble. Tough call you think?

Answer 1

Place a Stop Loss order at 25% and if your stock drops by 25% then you still make a lot of money.

Selling a winner is like selling Tom Cruise or Leonardo DiCaprio.

Sure, sometimes you may lose some money with one of their movies like "Narc" (I bet you did not see that one) but in the long term you will always make billions with Tom Cruise.

Answer 2

You could sell enough to recoup most or all of what you originally invested (ie you bought $1000 worth, its now at 1500, sell off $1000 worth or say half $750) and invest it elsewhere

That way you don't completely miss out if it continues to rise nor lose out if it declines.

Answer 3

I would sell. In the long term the return probably isnt going to be that good. What goes way up quickly can go way down quickly. Reversion to the mean can bite.

Answer 4

If you are properly diversified, it's a no brainer. Simply rebalance. That's a way to make sure you sell high and buy low.