Investment Sell Discipline

The decision to sell is the most difficult task of the investment process, even more so than the buy side. Therefore, our sell discipline is important.


Sell Criteria

Business values are dynamic in nature. Since both a company and businesses can continue to grow as long as they have a strong balance sheet and are well managed, close monitoring of these metrics is crucial.

Criteria to sell a position usually consists of a conversion activity such as mergers, acquisitions, spin-offs, restructurings, management buyouts, assets sales, and other activities. However, the more typical catalyst for a voluntary sell from the portfolio in the open market would include factors, such as:

  • the company becomes grossly overvalued in the open market,
  • the company appreciates and becomes excessively overweighted in the portfolio,
  • the business conditions change for the company,
  • management was given too much credit,
  • there has been an impairment to the intrinsic value of the company, or
  • our original analysis and/or idea was flawed.

Therefore, these criteria typically provide the portfolio with a very low turnover and long holding periods.  This reduces cost and is tax advantaged over long time periods.


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