When To Sell a Stock

Summary

Podcast Summary: Earn Your Leisure – "When To Sell a Stock"

Hosts: Rashad Bilal and Troy Millings
Date: February 23, 2026
Episode Theme:
This episode of Earn Your Leisure dives into one of the most crucial investment decisions: when to sell a stock. The hosts discuss different investor profiles, the importance of financial goals, common mistakes with holding or selling positions, and key market factors influencing these choices.

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Main Discussion Points & Insights

1. Investor Types and Financial Milestones

Timestamp: 02:13 – 04:05

• The conversation begins by differentiating between two types of investors:

  • The Aspiring Investor: Focused on reaching their first major financial goal.
  • The Seasoned Investor: Has already achieved several milestones.

• Core Insight:

  • Quote (Financial Advisor 2, 02:34):
    "If you have not hit whatever your freedom number is... there's no reason to sell. The way that the market is going with in terms of inflation... the value of the dollar is going to drop even more."
  • Hosts argue that, given persistent inflation and rising national debt, holding onto assets until you hit your "freedom number" (the amount of wealth that lets you live comfortably without stress) is generally more prudent.
  • Caution is urged against selling too soon, as you may need more capital in a future where the dollar continues losing value.

• Market Context:

  • Rising U.S. debt projections—predicted to hit $64 trillion by 2036.
  • Doubts about political leadership or fiscal discipline that could strengthen the dollar or economic environment.
  • Reference to Ray Dalio’s view on a "new world order"—adding urgency to a defensive, wealth-building strategy.

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2. When Selling is Necessary

Timestamp: 04:05 – 04:44

• Red Flags for Selling:

  • Drastic price drops in a stock (example: PayPal down 89%).
  • Fundamental changes in a company (loss of competitive advantage, loss of industry "moat").
  • Outperformance by competitors.

• Quote (Financial Advisor 1, 04:05):
  "When you start to see that your investments have taken a drastic turn, not just in price, but fundamental changes in the company, fundamental changes in the industry... I think it's important."

• Quote (Financial Advisor 2, 04:39):
  "If they're not one or two in the industry... you gotta let it go."

• Advised not to simply "hold and hope" when a company is in structural decline.

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3. Risk Management: Stop Losses

Timestamp: 04:45 – 05:15

• Stop Loss Advice:

  • Setting concrete stop loss levels is crucial to avoiding catastrophic losses, especially with declining stocks.
  • Example discussed: Investors who held PayPal through its 89% drop lost significant wealth by not limiting their losses.

• Quote (Financial Advisor 1, 04:53):
  "25% stop loss. Because... PayPal's down 89. So you can't just say, okay, I'm just going to hold it and hope for a miraculous comeback... That's not a recipe to build wealth."

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4. Macro Environment: Economic Trends & Cautions

Timestamp: 05:15 – 05:37

• Key Economic Concerns:

  • U.S. job creation at its weakest since 2003.
  • Consumer delinquency reached a nine-year high.
  • Small cap financial stocks are particularly exposed.
  • Debt-to-GDP ratio has increased from 60% (20 years ago) to 145% currently.
  • No realistic prospects for balancing the budget soon.

• Quote (Financial Advisor 2, 05:15):
  "Job creation is the weakest since 2003. Consumer delinquency hit a nine year high. Small cap financials are exposed to both."

• Conclusion: Economic and fiscal headwinds reinforce the importance of goal-based investing and risk management.

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5. Memorable Moment: The Freedom Number

Timestamp: 02:44–03:10

• "FU Number" Philosophy:
  • Wait to sell long-term positions until you confidently reach a set target (e.g., "20 million, 30 million, 50" or your own personal benchmark).
  • Suggestion that in current market and policy environments, most people should delay large-scale selling or liquidation of assets.

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Notable Quotes

• On Holding vs Selling:

  • "Now is not the time. Unless you've gotten to that mark of $20 million, $30 million, $50—or that other number that we talk about behind the scenes, now's not the time to sell or liquidate." – Financial Advisor 2 (03:36)

• On Weak Fundamentals:

  • "If they're not one or two in the industry, not to cut you off, but if they're not one or two, you gotta let it go." – Financial Advisor 2 (04:39)

• On Risk Management:

  • "25% stop loss. Yeah. Because like I said, PayPal's down 89. So you can't, you can't just say, okay, I'm just going to hold it and hope for a miraculous comeback." – Financial Advisor 1 (04:53)

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Key Takeaways

• Base your selling decisions on personal financial milestones, not market timing instincts.
• Monitor your investments for fundamental changes and industry shifts—don’t hold a losing position just for hope.
• Use stop losses to cap potential losses; don’t let big mistakes devastate your portfolio.
• Understand the broader economic context: rising national debt, weak job growth, and policy uncertainty make wealth-building even more essential.

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This episode presents a thoughtful and sometimes blunt discussion around the psychology and tactics of when to sell, highlighting that disciplined goals and risk management should drive your moves much more than hype or fear.

Transcript

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[Financial Advisor 1]

Okay, let's get into the when should someone sell a long term position?

[Financial Advisor 2]

I think this is a great question and you have two types of investors. The investor you're trying to get the capital together to get to your first goal and then you may have the second investor that's hit a couple of different targets. But my thing is, if you have not hit whatever your freedom number is and shout to the brother for this question, there's no reason to sell the re the way that the market is going with in terms of inflation. Just over the weekend, like I was on a plane coming back, right, U.S. debt will reach 64 trillion by 2036, doubling from 2023. I know that. We'll talk about the dow peaked at 50,000, even though there's all kind of unrest in the world. Debt to GDP, some are saying may hit 2 or 300. And that may be the baseline or median number for most countries going forward. So my thought is if you sell off your assets too early, unless you've hit your end goal number where you like, your FU number, you're going to need more capital in the future. And I don't see on either side, Republican or Democrat, a great potential leader in sight. So I wouldn't hold off and think, well, I have more than enough money right now. It would be a mistake. So if the debt is supposed to increase by that much by 2036, the value of the dollar is going to drop even more. Ray Dalio just put out this past weekend. We're in phase six of the new world order. So now is not the time. Unless you've gotten to that mark of 20 million, 30 million, 50, or that other number that we talk about behind the scenes, now's not the time to sell or liquidate.

[Financial Advisor 1]

And I think it's important just to pay attention to the positions that you're in because something like PayPal is down 89%. So when you start to see that your investments have taken a drastic turn, not just in, in price, but fundamental changes in the company, fundamental changes in the industry. They no longer have a competitive advantage. They long, they no longer have a moat. There's someone else in the, in the space that is more relevant than them, that's performing at a higher level than them. I think it's important just because it is.

[Financial Advisor 2]

If you're not one or two in the industry, not to cut you off, but if they're not one or two, you got to let it go.

[Financial Advisor 1]

Yeah.

[Financial Advisor 2]

Yes.

[Financial Advisor 1]

And you can't, like, you got to have a stop loss there too.

[Financial Advisor 2]

Like I said, 25.

[Financial Advisor 1]

25 stop loss. Yeah. Because like I said, PayPal's down 89. So you can't, you can't just say, okay, I'm just going to hold it and hope for a miraculous comeback. You had a hundred thousand dollars in PayPal, you know 10 years ago. Now you got $8,000. Like that's not a. That's not a recipe to build wealth.

[Financial Advisor 2]

I mean real quick. Job creation is the weakest since 2003. Consumer delinquency hit a nine year high. Small cap financials are exposed to both. Debts to GDP 20 years ago was 60%. It's currently at 145. They're not going to balance the budget anytime soon. No, not likely.

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[Financial Advisor 1]

That's why I goal gotta continue to go up.

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