drive all of an investment decision, but they certainly can be a factor. We very much like to “water the flowers and pull the weeds” meaning we like to trim the losers from our portfolio on a regular basis and invest more in the winners. In a taxable account, one can carry back capital losses for three years, or carry them forward forever. Sure, there is always the risk that a loser stock is going to soar, but it happens less than people think.
When looking at some stocks as sell candidates, then, take a look at how many C-suite executives have turned over in the past couple of years. If it is more than average, you might have found a good candidate to sell. This indicator is less helpful when a stock is doing well. After all, when a stock has soared, some executives will no doubt simply cash out and retire. But constant, consistent executive turnover is more often a negative sign, and very rarely a positive sign.