ET Alpha Wealth Summit Fireside | Never sell because you're bored': PPFAS CIO Rajeev Thakkar's 6-point guide on when to exit an investment

At the ET Alpha Wealth Summit held in Mumbai last week, Rajeev Thakkar, Chief Investment Officer at PPFAS Asset Management, delivered a pointed session on one of the most neglected skills in personal finance, knowing when to sell. While the investment world obsesses over entry points, Thakkar argued that staying invested wisely, and exiting at the right time, separates wealth creators from the rest.

Opening with a sharp reminder to the audience, Thakkar noted that turning a meaningful corpus into generational wealth requires staying the course through 14 "doubles", and that most investors undo their own compounding through hyperactivity.

"When you drive a car, 95% of the time is spent looking out of the windshield. In investing, 95% of the time people keep looking at past returns, and that is the problem," he said

He walked the audience through the most common and costly reasons investors sell incorrectly: boredom with a sideways stock, reacting to daily news cycles, booking profits out of habit, and chasing newer, shinier ideas. All of these, he said, destroy wealth systematically, while enriching brokers and the finance ministry through taxes and transaction costs.

"Investing is not meant for your entertainment. If you want entertainment, go to Vegas," said Thakkar.

6 reasons to sell

Thakkar then laid out six legitimate reasons to sell.

• The clearest is needing capital for a better opportunity, such as a family office reallocating into a business they know deeply.
• The second is recognising a mistake early and cutting losses, which he called harder but more valuable than finding great ideas. He referenced a well-known Indian liquor baron whose foray into aviation would have been far less damaging with an earlier exit.
• A third trigger is fraud, exit at the first sign, no exceptions.
• The fourth case is structural disruption: digital cameras for Kodak, EVs for combustion engine makers, or AI for IT services. Thakkar said these require ongoing judgment rather than a one-time call, and that investors must revisit their thesis every few months in fast-moving sectors.
• Fifth is extreme overvaluation; when 15 to 20 years of future growth is already priced in, as was the case with large-cap Indian IT stocks around early 2000.
• Finally, a clearly superior opportunity — even if it means paying capital gains tax — can justify switching out of a reasonably valued position.

"The people who do not sell when they make mistakes will have their capital locked up in dud ideas and will not be able to take advantage of good opportunities." said Thakkar.

Closing the session, Thakkar echoed Warren Buffett's maxim: it is foolish to risk what you have and need, for what you don't have and don't need. His final advice — stay diversified in your investment portfolio even if your wealth was built from concentration in one sector or company.

ET Alpha Wealth Summit is powered by RedHexo SIF by HSBC Mutual Fund, The Macallan as the Experience Partner, and MProfits as Exhibit Partner.