As investors, all of us have our own individual weaknesses. Mine is simply stated: I'm very bad at selling.
Over the years, I've done well out of shares such as Greggs, ReckittBenckiser, Compass, GKN and Weir, for instance. In each case, the shares soared in value, and then slid back.
I'm still well up, of course.
But in theory, I could have sold, and banked decent profits - profits rather higher than I'd be looking at, were I to sell now.
Sticking to a strategy
This aversion to selling isn't necessarily a mistake.
As a strategy, I pursue 'long term buy and hold', for one thing. So jumping in and out of shares is clearly inconsistent with that objective. And as objectives go, I'm in good company: remember Warren Buffett's oft-repeated remark about his ideal holding period being forever.
For another thing, these days I'm primarily an income investor - and certainly so as individual shares go, rather than index tracker funds and ETFs.
So to that extent, hefty capital gains are irrelevant. At best, all they provide is an assurance that the stock market thinks that my shares are decent picks, worth bidding up the price to acquire.
And at worst - were I to use a broker that charges portfolio fees based on portfolio value - all a rising share prices does is add to my costs.
Run winners, sell losers
Some investors take a very different approach. In particular - like me - they tend to 'run winners', namely hold on to shares that have done well, rather than take profits.
But they're also keen to cut their losses and dump shares that have performed poorly, or announced profit warnings or similar bad news.
Here again, I'm very bad at selling. I still hold a large stake in Tesco, for instance. I held on to Lloyds as it plunged during the banking crisis.
And in neither case could I take refuge in the fact that, as an income investor, it's the dividends that count: in both cases, the companies cut their dividends completely - Lloyds for six years.
Hanging on for recovery
To behavioural psychologists, this kind of behaviour is classed as 'loss aversion'.
Investors don't like to lose money, goes that argument, so they hang on to shares in order to avoid recording a loss.
Well, yes. But I'm also acutely aware that shares (and the companies behind them) can recover, and sometimes quite quickly.
Businesses can 'self heal' as managements take remedial action, for instance, and the stock market can re-rate a share as it takes a different view of its prospects.
Indeed, one of the consequences of a strategy of opportunistically buying beaten-down shares and sectors is that it's difficult to call the bottom: the fact that a share has fallen in value doesn't mean that it won't continue to head lower.
So when do I sell?
Well, part of the answer is that I rarely need to. That's not arrogance: it's just a reflection of the fact that, like our analysts on the Motley Fool Share Advisor service, I tend not to buy without giving careful consideration to the company in question.
Typically, I'll have identified it months in advance, and will simply have been waiting for an attractive entry level before buying.
Again, it's a strategy that has consequences. As I've remarked before, international drinks giant Diageo has never quite got cheap enough for me to push the buy button. Ditto specialist engineering firm Renishaw, and a number of other sound businesses.
Instead - again like my colleagues at Share Advisor - I'm most tempted to sell when the original investment thesis has materially altered.
There's nothing particularly complex or abstruse about this. It's simply a way of saying that the company in question no longer ticks the boxes that it did when the shares were bought.
And I suspect that I'm - unusually - about to reach that conclusion in respect of a share that I hold, namely publishing firm Pearson.
I think of it as the "Woolworths test" - a nodding reference to the criticism often levied at the troubled high-street retailer before it finally collapsed.
Namely, if it didn't exist, would you invent it?
A different focus
Or, in the case of shares, would you buy this same business today?
Back when I bought into Pearson, it owned publishers Penguin Group, the Financial Times, and a 50% stake in The Economist. It's since sold the Financial Times, disposed of the stake in The Economist, and merged its Penguin consumer books divisions with German giant Bertelsmann.
In addition, it's declared itself to be 100% focused on education, and on the American education market in particular - which happens to be struggling.
It's not, in short, the same business that I bought into. And I wouldn't buy into it today. So I suspect that I'll soon be selling Pearson - despite the loss that I've made.
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Malcolm owns shares in Greggs, Reckitt Benckiser, Compass, GKN, Weir, Tesco, Lloyds Banking Group, and Pearson. The Motley Fool owns shares in GKN, and has recommended shares in Reckitt Benckiser, Weir, Diageo and Renishaw.