Buy, Hold, Die…? 💼💤

“Buy, hold, die” sounds great, right? Buying stocks is fun, but selling? That’s the tough part. I used to cash out quick for a profit, but mentors like Warren Buffett and Charlie Munger taught me the real gains come from holding great companies. Still, there are times to sell. Let’s break it down.

When to Sell Stocks

1. The Business Breaks 🏚️

Sell when the company’s core is crumbling—lost competitive edge, fading profits, or untrustworthy leadership. Ask: “Would I buy this today?” If not, it’s time to go.

Example: GE was once a titan, but bad acquisitions and debt sank it. Those who held on too long paid the price.

Buffett’s Move: He shut down Berkshire’s textile business when it lost its edge, redirecting cash to better bets.

2. A Better Opportunity Beckons 🚪📈

If a new stock offers stronger upside, safer fundamentals, or more growth potential, I’ll swap. But it has to be a clear upgrade—no chasing shiny objects.

Munger’s Rule: Sell only for something you like immensely better. It keeps you disciplined.

3. You Got It Wrong ❌

Admit it: sometimes we screw up. Misjudged the business? Trusted a flashy CEO? When the facts change, swallow your pride, sell, and move on.

Buffett’s Wisdom: “If you’re in a hole, stop digging.” No shame in cutting losses.

When to Think About Selling (But Don’t Rush) 🧘‍♂️

Before I sell, I always think about the tax impact. Selling a stock at a gain can trigger capital gains taxes, which take a bite out of my returns. If I’ve held it less than a year, it’s taxed as ordinary income—which can be as high as 37% in the U.S. for high earners (as of 2025). But if I’ve held it for over a year, it qualifies as a long-term capital gain, typically taxed at 15–20% for most people.

That’s why I don’t rush into selling just because a stock looks expensive or has run up. Sometimes it’s smarter to hold and defer taxes—especially if I still believe in the long-term story. Minimizing unnecessary tax bills is part of playing the long game. After all, it’s not just what you earn, it’s what you keep.

1. It Feels Too Expensive 💸📊

When a stock skyrockets, I wonder: “Is it overpriced?” If the valuation far exceeds the business’s worth, I might trim. But great companies often grow into “crazy” valuations—think Tesla’s PE hitting 1200. Selling too early can mean missing massive gains.

How I Handle It: I sell covered calls to collect premiums while keeping the stock. If it hits the strike price, I can roll the call to a higher price and later date, staying invested without bailing too soon.

2. It’s Dominating Your Portfolio 🧨

Risk control is everything. Even if I love a stock, I don’t let it balloon to where a crash could wipe me out. I trim to a size that lets me sleep easy, no matter what.

My Mantra: Stay in the game. Always.

3. You Need the Cash 💰🏠

Life happens—house payments, medical bills, or retirement needs. Normally, I use options to generate the cash—selling covered calls and cash-secured puts is my go-to strategy to bring in income while holding onto great businesses. If that’s not enough, then I’ll consider selling shares—starting with those that are fairly or fully valued, not my best long-term holds.

Munger’s Take: Wealth is for disciplined use, not just hoarding.

What I Don’t Sell For ❌📉

1. Market Noise 🌪️

Stocks dip 5% daily. If the business is solid, I ignore the noise. Amazon fell 30% in 2014 but rewarded patient holders.

Buffett’s Gospel: “The market transfers money from the impatient to the patient.”

2. Panic or Greed 😱😈

Selling in fear during crashes (like March 2020) or cashing out early to “lock in” profits often backfires. Stay calm, stick to your process.

Munger’s Motto: “The big money is in the waiting.” (It’s taped above my desk.)

3. Just a Quick Profit 🚀💵

Doubling your money feels great, but selling just because you’re up is a trap. Nvidia’s early sellers missed AI-driven gains. If the upside’s still there, hold on.

Buffett’s Advice: Don’t cut flowers to water weeds. Let winners run.

Final Thought 🌱📈

Selling is part of investing, but it’s not a reflex. The Relax to Rich mindset is about holding great businesses, avoiding panic, and trading only when it makes sense. Don’t chase trends or stress over daily swings. Focus on what you understand, stay patient, and build wealth over decades. That’s how we go from anxious to confident, busy to focused, and—ultimately—stressed to relaxed on the path to rich. 😌