Jason Hall

More importantly, it makes us harder to take actions that are not in our own best interest.

So my checklist for selling includes a few things.

The first, if I'm selling because I've reached a financial milestone and it's time for me to sell stock, maybe I need to shift some of that stock wealth I've accumulated to bonds or to cash because I'm closing in on a financial goal.

Maybe I'm in retirement or it's part of my income strategy.

Number one, that's great.

Guess what?

You're selling because you've reached financial goals.

That's optimal.

Now, if it's not for one of those reasons, you have to start asking myself why.

some questions.

I start with asking, am I selling for business reasons, macro reasons, or valuation reasons?

If the business is no longer meeting my thesis expectations, what has changed?

What's changed in the business?

Then I start asking myself, well, has that changed because of the business, for competition, or a macro reason?

If a business is going through a tough time in the cycle, macro things are

Often I force myself to really reevaluate my thought process because history tells us the worst time to selling a struggling stock is when macro or cycle factors are causing it to struggle.

You're probably selling the bottom.

If it's valuation, I force myself to evaluate the business from a longer term perspective.

Because using valuation for a very mature company like a Walmart or a Target is very different than a growth-oriented one, like the Rule Breakers that we've talked about, particularly for investors with very long time horizons.

My biggest sell mistakes were for valuation on businesses that can easily grow their revenues by 5X or 10X their current levels over the next 10 or 20 years.