Mastering Profit Trimming

Turning Good Bets into Lasting Gains

You’ve got an investment that’s taken off, swelling your portfolio and making everything look rosy. The temptation hits to lock in those gains before they vanish. Yet smart investors know trimming isn’t about fear or greed. It’s a calculated move to keep things growing stronger. What if the best way forward isn’t selling at some random peak, but redirecting funds to even brighter spots?

Here’s our general “TLDR“ approach to trimming profits, beyond simply following Capitalist Exploits sell alerts:

1. Think in relative opportunities, not fixed profit targets

We strongly push relative value over arbitrary rules like “sell half when it doubles.”

• Don’t ask: “It’s up 100%, should I trim?”

• Do ask: “Is there something else I can buy today that’s clearly better on a risk/reward basis than what I already own?”

Example: if a silver position grows from 5% to 15% of your portfolio, we’d look around and might:

• Trim part of silver.

• Rotate some of that capital into something cheaper/more asymmetric (e.g., Brazilian equities, energy, etc.)

So trimming is usually done to fund a better idea, not because a line on a chart went up “enough.”

2. Focus on valuations and positioning, not just price

Price alone is misleading:

• A stock that doubles in price but also doubles earnings is not more expensive in valuation terms.

• If you were happy to buy at $1 when it was cheap, and now it’s $2 but earnings have doubled, it can still be fairly valued.

You don’t automatically trim just because something is up…you trim when:

• Valuations are stretched, and

• There are other assets/sectors that look much cheaper by comparison.

  

3. Use position size and comfort level as a guide

• Small starters (e.g., 1% positions) can be allowed to grow to 5–10% before trimming.

• If something becomes an “uncomfortably large” weight (e.g., 15–20%+), that’s a strong reason to:

  • Take some off the top.

  • Rebalance into other attractive themes.

Rule of thumb:

• 2–3% allocation that’s done well? Probably fine to leave alone.

• 15–20%+ allocation in a single metal/ETF/stock? Time to seriously consider trimming and redeploying.

  

4. Trim when you need funds for a better idea

Here’s a concrete pattern:

If you started with 1% in a name, and it grows to 5%, and you see something else that’s clearly compelling but you’re out of cash…there’s “no harm in taking a bit of money off the top” to fund the new idea.

So:

1. Let winners run long enough to matter.

2. When a new, clearly superior opportunity appears, harvest part of the gains from big winners to fund it.

   

5. Accept that trimming is part of portfolio management, not market timing

• We almost never say “this sector is up X%, we’re out completely now.”

• We usually make relative shifts: “less of A, more of B,” not “all-out of A.”

• This is about keeping the portfolio robust for 10–20 years, not nailing tops.

You’re trying to:

• Stay in the game long term.

• Avoid oversized, emotionally stressful positions.

• Keep capital flowing toward the most asymmetric, capital-starved opportunities.

  

6. Make it fit your “recipe”

There is no universal percentage trigger:

• You must design a “recipe that works for you”:

  • So you can sleep at night.

  • So you can stay invested through drawdowns.

  • So you’re not forced into emotional decisions.

So, your trimming rules should reflect:

• Your risk tolerance.

• How concentrated you’re willing to be.

• How hands-on you want to be with rotation.

  

In short

Our general approach to trimming profits is:

1. Don’t use arbitrary rules like “sell half when it doubles.”

2. Trim primarily when:

   • A position has become too large in your portfolio, and/or

   • You see a clearly better asymmetric opportunity elsewhere.

3. Base decisions on valuations and relative opportunity, not price alone.

4. Rotate, don’t react: take some from big winners to fund new, cheaper, high-upside themes.

5. Build a personal, sustainable process you can stick with for decades.

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