Buy, Hold or Sell Decision

Introduction

After research and valuation, you must decide: buy, hold, sell — or pass. This lesson turns your analysis into an action.

The Buy Decision

Buy when:

• Value > price with a meaningful margin of safety
• The thesis is sound and drivers are intact
• It fits your portfolio and risk plan
• You can size it so one failure doesn't hurt

The Hold Decision

Hold when:

• The thesis still holds
• Valuation is fair — neither a bargain nor extreme
• Nothing has materially changed
• Stay because the idea still works, not out of inertia

The Sell Decision

Consider selling when:

• The thesis breaks — the original reasons no longer hold
• Valuation is extreme relative to the outlook
• A better opportunity with better risk/reward appears
• You need the capital or need to rebalance for risk

The Pass Decision

Passing is a position too:

• No margin of safety? Pass and wait
• Uncertain business you can't value? Pass
• Respect your circle of competence

Decisions, Not Headlines

Base every call on your written thesis and numbers, not hype or a headline. Emotion and fear of missing out (FOMO) are the enemies of good decisions.

Summary

• Buy: value > price with margin of safety and a sound thesis
• Hold: thesis intact and valuation fair
• Sell: thesis breaks, valuation extreme, or better options
• Pass is always valid — respect your circle of competence
• Decide on your thesis and numbers, not headlines

Next Lesson

Staying the course: monitoring, exit and portfolio fit.