(All props first to Salt-n-Pepa).
In early-Feb, I published my first write-up on Richland Resources (RLD:LN), flagging an Upside Potential of 137%. Three weeks later, I was looking at a 65% gain on the share price. This presented an interesting dilemma (would that we could all enjoy more of these..!). But it seemed strange to be contemplating a sale so soon after diving in. Aren’t I a long-term holder, like most value investors..?! Well, ideally…but I use price, technicals and risk management to scale in and out of my positions.
For example, picture a GBP 100p stock I recommend/hold, and which I believe has a 125% Upside Potential. Sweet! With this kind of upside, I might have something like a 5% portfolio allocation. Shortly after, the stock shoots up 75% – so what do I do?! Well, in value investing world this is entirely expected (value will out, etc…) and I should definitely just sit tight. And sure I’ve got another 50% of value to realize…buy and hold, baby! Of course, in the real world, the answer may be a little different…