When to sell excellent technology companies

Philip Fisher, mentor to many growth-oriented investors, concentrated on technology companies with excellent long term potential because they had developed teams of people who could continuously innovate and thus be one step ahead of competitors. When buying he asked questions like,

..

.

• Are the people running a firm outstanding?
• Does it hold a strong competitive position?
• Are operations and long term planning handled well?
• Are there enough high potential new product lines for growth to continue for many years?

If he got a yes to all his questions, and the shares were trading at a reasonable price, he would buy.

So long as the quality of the people in the organisation and the competitive position did not deteriorate his advice of selling shares in this type of company was succinct:  almost never.

Fisher however did occasionally sell stocks, for two main reasons;

• Firstly, when an error had been made in the original assessment of the company, and the company factors were less favourable than supposed. In this case it is vital that the error is recognised and corrected quickly, and that the investor has the honesty and self-control both to accept that he/she is fallible, and also to learn from the misjudgement.
• Secondly, there...To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

WHAT IS ADVFN?

ADVFN covers all things stock market.

From the news and opinion pieces on pages like this to share discussion forums, charting tools, financials, live share prices and Level 2, order book data

If you trade or invest ADVFN has the tools you need to make the right decisions.

• 

  101 Ways to Pick Stock Market Winners

  You need the number one bestselling investment guide, the definitive text for day traders, investors and stock pickers.

• 

  The Death of Wealth

  Dissecting the global economy and the financial markets, the book lays out the evidence for the next economic game changer: the Death of Wealth.

• 

  Matt Simpson

• 

  Neil Woodfine

• 

  Peter Gold

• 

  Long Over Short