Avoid Emotional Trading Sizing Your Positions to Your Conviction Level

Using IRR to Determine When to Sell

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One lesson learned after enduring a few too many round trips is to take more of an IRR [internal rate of return] focus on when to sell – what is the return potential from today, not “I’m holding this until it reaches my target price of $X.” We’ll still ride things up and down, but it’s been less frequent since we starting thinking more in terms of today’s IRR. When we no longer believe something can make us 50% over the next two years, we start picking our spots to sell.
Source: http://www.valueinvestorinsight.com/