Nice way to frame one of the key issues we all face while selling.

I am a bit of a heretic when it comes to valuation - I believe a company is worth what the market is prepared to pay for it. I also believe the market is fickle, driven by emotion (or algorithmic trading) more so than facts, so I accept that volatility is the price of entry.

As long as a company demonstrates long term revenue and profit growth, has clearly got capable management with a track record of market leadership and with several levers available to support further growth, then I pretty much leave it to get on with it. There will be times of undervaluation and times of overvaluation, depending on changes in the variables you put into a DCF or changes in what the market perceives to be a reasonable PE ratio.

I pretty much ignore these fluctuations. TNE is 5% of my SMSF portfolio, I've held for 7 years with a top up along the way, and I fully expect to be holding when the $1 billion ARR milestone is reached.

@Shapeshifter yes, that capability is also available on CommSec, in CommSec IRESS. However, as I transact relatively infrequently, I'd have to subscribe to this service at $82.50 a month, for a service I wouldn't use that much. Before today, my last RL sale was almost 2 months ago.

In any event, I prefer manual decisions. I always take time to weigh up my decision based on valuation and what's going on in the market. I've no doubt I could be leaving money on the table.

I had decided some time ago to exit $TNE once it hit the top end of my valuation range, and it was just a matter of waiting.

I also have to be careful with some of my positions, placing a trade when I can see the volume is available, because if the price trigger is hit when the SP is falling, I might not be able to get out without pulling it down further if there is limited liquitity. (That said, my RL positions are not big enough for that to be a problem with $TNE, but they are on several other stocks.) I know you can manage this via price limits.

So, you may be right. For all I know, $TNE might $30 in a week, and I could sell on a pull back to $29!

I do use alerts a lot within Commsec, both rising price and falling price. particular for watch list items, which can move quickly without me seing it immediately. So, for example, effective today I have a price alert on $TNE for when the price falls back below $23.50.

@Shapeshifter I never use a stop loss because too many times I have been stopped out on a momentary spike down, only for the share price to keep rising. I agree with mikebrisy, just put on an alert and do it manually where you have more context about why the price is moving. Regarding CMC Markets, I NEVER use a stop loss using a market maker because they can have large price errors during market gyrations. Beware. They will literally widen the pricing error during a gap down just to take you out. That's how market makers always win.

Instead of selling out completely of a company I still have conviction in but it is highly valued, I prefer to use position sizing. I.e. I might sell down to half or third of the current position size and then buy incrementally to maintain that sizing as it the price drifts lower. That way I still hold some position in case the price just keeps going up, but can buy more if the price drops. So I have a foot in both camps. I do this mainly to avoid the risk of not being able to reenter are a favourable price, plus also my valuation capability is limited so I am never really sure if something really is overvalued. For me, some of my biggest winners appear to be permanently overvalued so it has kept me in those.

Some very practical and time-proven tips for market movements @actionman Thanks for outlining what we could all do a bit more of if long term goals/gains are our focus!!

I'm reminded of a Peter Lynch quote: "Show me a portfolio with 10 percent stop loss orders and I’ll show you a portfolio that loses 10 percent." Another along similar lines, “If you can’t convince yourself ‘when I’m down 25 percent, I’m a buyer’ and banish forever the fatal thought ‘when I’m down 2 percent, I’m a seller,’ then you’ll never make a decent profit in stocks.”