This begs the question of how one decides which stocks should be sold. Our Investing Daily investment experts have already provided some guidance on this question in a previous advisor roundtable. It's a good read; I highly recommend it. read more
An investor who sells a $40 stock with a $20 short-term gain must find a new stock that outperforms the sold stock by 21.2% just to offset the taxes! In contrast, selling the same stock with a long-term gain requires that a replacement stock outperform by only 8.1% to reach breakeven. read more
When Buffett does sell a stock, the success of the transaction is closely tied to the original buy. "Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results," he is quoted as saying in the 1995 book Buffett: The Making of an American Capitalist. read more
Buffett will occasionally talk about his reasoning behind buying or selling a stock, as he did with Apple, but not always. Specifically, we don't know why Buffett (or one of his stock-pickers) decided to increase two airline stakes and decrease another, or why Fox is no longer a part of Berkshire's portfolio. read more