I got a question from a self-described “loyal reader” of Capital & Crisis. I began to answer it, and my response turned into a mini-treatise on the art of selling stocks. Here is the question:

“Chris: I see a remarkable contradiction in your latest issue of Capital & Crisis. At the outset, you extol the virtues of [the successful investor Thomas] Phelps, who was an advocate of buy right and hold long, with the rest of your strategies, which seem based on sell half, take profits, and let the rest run. As you publish the bookkeeping on how long you have to stay in on an initial investment, undisturbed, to make a big profit at a given rate of return, why not make an equal effort to bookkeep what happens to your initial investment and final returns when you take half out every time it doubles? Let’s see what it makes you or costs you to do it that way. It seems to me that the take-profits approach is an admission of a lack of confidence in self or the company, but somehow feels like falling down stairs every time you almost reach the top.”