When Do You Sell Out of A Long Term Investment?

To date, I have been talking about trades and the exit of these.

Why?
Exiting long term investments are rare and therefore don’t happen regular enough like trades to be shown on a weekly basis. Today, there is finally that chance.

Pharmaceutical giant Pfizer has been a favourite of mine as a long term investment this past year and has also been a favourite holding for several big name value fund managers like legendary Irving Kahn who holds almost 10% of his portfolio in Pfizer stock. A very high conviction play.

I began accumulating Pfizer stock 290 days ago and it has had a good run, but now is the time to finally exit out of this very profitable position and move onto something else.

PFE Trade Completion - 29.5.15

Result of this trade;

Trade Exit –PFE, Pfizer

Stock Exit @ $34.51 on 29 May 2015 (Blue Shade).

Stock Entry @ $27.3 on 20 October 2014 (Green Shade).

Total Return on Investment (ROI) of +23.56 or +39.09% annualised.

Call Option Exit @ $4.70 on 29 May 2015 (Blue Shade).

Stock Entry @ $1.23 on 21 October 2014 (Green Shade).

Total Return on Investment (ROI) of +282.11% or +470.19% annualised.

Duration 220 days.

Reason for exit; 
Pfizer is overvalued by almost 30% on a long term intrinsic value and financial position has slightly deteriorated over the past quarter making it a good candidate to exit and look elsewhere.

 

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