Right Time To Sell A Value Stock

By Rajat Sharma

[klarman]

In his letter to Berkshire Hathaway shareholders in 1992, Warren Buffet wrote:

“Growth is always a component in the calculation of value, constituting a variable whose importance can range from negligible to enormous and whose impact can be negative as well as positive.”

The success of all investing depends upon ability to predict the future, more importantly, the ability to forecast future growth and then estimating the underlying value which a stock offers at its current price.

2 important questions arise at this point:

1. How do you value a stock based on its current price?
2. When should you sell a value stock?

[I] Valuing The Stock Based On Its Current Price

How you value a stock depends on a whole host of qualitative and...