When do I sell an investment?

When to sell?

I get this question a lot, and its a valid question. 

First, let me preface that you need to wear an "Owner" hat. If you start a business today, you are not going to be selling it next month or next year right? In other words, having a long term mindset. Then, when do I sell?

1. When the fundamentals / story changes. When I invest in a company, there is usually a reason / "story" behind why I did it. When those fundamentals change, it means my original thesis might be wrong. Hence I would look to sell. For example, digitalisation has disrupted many businesses and may disrupt many more. Newspapers come immediately to mind. But that's an easy, obvious one in hindsight. 

2. When I find another compelling idea and I am already fully invested. I don't like to borrow money to invest so if I am fully invested and I find a really compelling investment opportunity, I might have to sell an existing investment in order to fund this new investment. But the key word is compelling. This new idea needs to be visibly superior.

3. When the investment is at crazy valuations, say more than double my estimate of intrinsic value. But this one is tricky. I could have been too conservative in my estimate of IV. And often the market will surprise you on how high it can go and defy the odds. 

How about you?