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As global markets experience heightened volatility amid trade wars and geopolitical tensions, investors, once flush with confidence, are again faced with a question they fear the most: Should I sell?
It's an unsettling question. But as Kuntal Shah, co-founder, Oaklane Capital, points out in his talk, "The Art of Selling", it's also a blind spot we rarely address. "Buying appeals to everyone," he says. "Selling only matters to those who already own the stock. It's an asymmetric conversation."
To make his point, Shah draws on the Mahabharata. Like Abhimanyu, the warrior who knew how to enter the Chakravyuh but not how to exit, most investors know how to build portfolios but never learn how to unwind them. In this piece, the first of our series, we decode Shah's views on why this happens, how selling is more an emotional act than a tactical one and how temperament heavily dictates investors' selling decisions.
The error in exiting
Shah frames investing as a five-step journey: What to buy, when to buy, how much to buy, whether to add more and when to sell. While the first four get all the attention, it's the last one that often makes or breaks your returns. And the major mistakes investors often make with regards to selling is either doing it too soon or waiting too long before exiting.
This is why it's crucial not to be swayed by short-term fears or hopes. If you've held an asset for a while, assess if it's still aligned with your strategy before pulling the trigger.
The investing journey from start to finish
| Stage | Common mistakes |
|---|---|
| Buying | Chasing trends or tips without conviction; buying businesses not understood |
| Sizing | Overexposure to a new idea; averaging down blindly in poor stocks |
| Holding | Staying too long with mediocre businesses due to inertia or over-attachment |
| Trimming | Letting winners become dangerously large weights in the portfolio |
| Selling | Selling too soon out of fear, or holding too long out of hope |
Don't try to clone conviction
Selling, Shah says, isn't just a financial decision. It's an identity crisis. You're not just letting go of a stock, you're letting go of a belief. This is why investors often look to others to manage such decisions.
But he strongly cautions against blindly following others or market legends, even if it is Warren Buffett or Charlie Munger. "You can't just copy someone else's playbook. Their capital, mandate, and temperament are different."
Shah draws attention to how their market strategy is in fact often at odds with their principles. Buffett called airlines bad businesses, yet owned all four. Warned against derivatives, yet Berkshire underwrites them. Preached long-term holding but over 60 per cent of his positions have been held for under a year. "What he teaches is for the masses. What he practices is tailored to his context."
Cloning gives us comfort, but it's often a substitute for doing the hard thinking ourselves. And when it comes to exits, no one else's answer will fit your question. The right exit depends on your capital, mandate, risk appetite, temperament and time horizon—not someone else's. Selling isn't universal. It's contextual and deeply personal.
The investing jungle—you might not be who you think you are
After laying out how personal selling is, Shah delves into what may be the most underappreciated variable in any investment decision: the investor's own evolving temperament. "Investor behaviour towards risk and reward is not static," he says. "It changes".
Investors like to believe they are rational and make objective decisions based on facts. But in truth, one's responses shift with the mood of the market, the size of their gains or losses or simply what's trending on financial TV.
As per Shah, investors don't act like consistent professionals but often morph into different animals without realising it.
"Sometimes we behave like sheep—we buy what everyone's buying. Sometimes like a connoisseur—we hold great businesses for long. Sometimes we're a rabbit—we freeze and refuse to sell at a loss. And sometimes, we're just a raider—jumping in for a quick trade."
What's striking is not just that these patterns exist but that they exist within the same investor. You can be a rabbit in a correction, a raider in a rally, and a pig when chasing tips all within one market cycle. Below is a simplified representation of the jungle Shah describes:
The investing jungle: What kind of animal are you today?
| Species | Buying behaviour | Selling behaviour |
|---|---|---|
| Connoisseurs | Invest in quality businesses that generate steady earnings | Sell losers quickly, hold on to winners for long |
| Raiders | Buy and sell quickly to make a quick buck | Book profits fast, often leave big gains on the table |
| Assassins | Set stop-losses, stay unemotional | Exit if stop-loss triggers or thesis fails |
| Hunters | Start small, size up on dips | Exit when conviction weakens |
| Rabbits | Anchor to first impression or buy price | Avoid selling in loss |
| Stags | Buy only IPOs | Exit once desired profit is hit |
| Whales | Take large positions, move markets | Exit in bulk, moving prices |
| Tortoises | Slow, long-term accumulation | Reluctant to sell |
| Pigs | Follow tips, take impulsive bets | Poorly timed exits |
| Wolves | Try to manipulate market | Sell unethically for personal gain |
| Ostriches | Buy on feel-good stories | Ignore bad news, avoid taking losses |
| Sheeps | Follow the herd | Sell if the herd sells |
| Bears | Exit shorts, cautious in bull markets | Sell when negative signs emerge |
| Bulls | Buy aggressively in rallies | Sell at first sign of downturn |
His warning isn't that one type is right or wrong, it's that investors often don't know which one they're being at any given moment. And that's dangerous.
Fluctuating temperament according to fluctuating market mood can often lead to poor selling decisions. The key thus is recognising which version of yourself is making the decision at any given moment. Are you acting out of fear or are you sticking to a carefully thought-out strategy? If you find yourself making inconsistent decisions based on emotions like fear or greed, it's a sign you need to reassess your approach to selling.
You don't have to buy and hold
Shah also challenges the most cherished myth in investing: buy and hold. It sounds noble but often becomes an excuse for buying and forgetting. "We're told our holding period should be forever. But in the long run, we're all dead."
He points to MSCI China, which has delivered zero real returns over three decades and Wipro, which took 20 years to recover to its tech bubble peak. "Thirty years may look short on a chart. But when you live through it, it feels like a lost generation."
The lesson is simple. Just because you bought a stock doesn't mean it will remain a good investment. The market isn't static and a stock that seemed promising at the time of purchase may not continue to serve your goals in the long run. Assess your holdings regularly and don't be afraid to sell if the stock no longer fits your objectives.
The pain of letting go
But it is easier said than done. Selling when your original thesis changes often brings with itself self-doubt, making the process a psychological minefield. "It raises the question: Am I capable? Am I doing my job well? Do I even know what I'm doing?," Shah says.
Below is how he breaks down the different cognitive aspects of selling and how they influence investor behaviour.
Cognitive aspects of selling
| Trigger/Behaviour | Cognitive bias/Mental trap | Result |
|---|---|---|
| Selling at a loss | Recognition of a mistake becomes necessary | Emotional pain causes hesitation to act |
| Anchoring and loss aversion | You hope for losers to bounce back to cost price | End up holding on too long, capital gets stuck |
| Trimming | You are reluctant to reduce large winners and fear underperformance | Reduced outcome, loss of momentum |
| Selling winners | You face endowment bias, reinvestment risk, positive feedback loop | FOMO leads to hesitation to reallocate |
| Selling multi-baggers | You get stuck with emotional attachment, nostalgia, fear of regret | Seller's remorse, missed continued compounding |
What makes selling uniquely difficult is that it exposes more than your portfolio, it exposes your mind. And even legends aren't immune. "Stanley Druckenmiller shorted tech early, then flipped and went long $6 billion near the top", Shah recounts. "He lost half of it in six weeks."
Bill Gross lost 44 per cent of his AUM in a single misjudgment. And even Isaac Newton, after exiting the South Sea bubble with a fortune, re-entered out of envy and lost everything.
"I can calculate the motion of heavenly bodies," Newton said, "but not the madness of men." And that, Shah reminds us, is the ultimate challenge of selling.
Selling forces us to confront our fears, our flaws and our fantasies. It's not a technical decision, it's an emotional reckoning. And in a world obsessed with what to buy, perhaps the wisest edge lies in knowing how and when to let go.
Also read: How Sunil Singhania picks and exits stocks
This article was originally published on May 12, 2025.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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