The art of selling shares

Erik Landgraff, co-manager of the Skagen Kon-Tiki fund, on how best to offload shares, and some common pitfalls to avoid.

The selling of stocks often gets less attention than it deserves. However, one sales strategy often given a great deal of attention is stop-loss. The idea is that an investor can limit the loss of an investment to a predefined limit. In other words, a stock is automatically sold when the price reaches a given point. This strategy is not only unprofitable, it is also illogical. If a company is priced lower on the stock exchange than what we consider to be its intrinsic value, and the price then falls, we would buy more – not sell – provided the fundamentals have not changed significantly....