On Not Having a Price Target
Every target I have ever set was either reached and ignored, or missed and revised. I stopped setting them and the decisions improved.
I used to have price targets. Levels at which I would sell a portion, written down, treated as a plan.
The record of what happened to them is unflattering and instructive.
What actually happened to my targets
2017: a target reached and ignored. The price passed it and I revised the target upward, with reasoning that sounded like analysis and was not.
2018: a floor breached and not acted on. I had written a level below which I would exit. It was breached. I did not exit, which turned out well and which was not discipline. It was paralysis. Had the decline stopped ten percent higher, I believe I would have sold.
2021: a target reached, partially acted on. I sold a portion. Then revised the remainder upward.
2022: no target, which was an improvement.
Four attempts, zero cases where the number did what a plan is supposed to do.
Why targets fail
They are a promise about a future emotional state. Writing “I will sell at X” is predicting how you will feel when the price is X, and you do not know, because the conditions at that price will be different from the conditions now.
The number is arbitrary. I have never been able to defend a specific price with anything other than round numbers and previous highs.
They invite revision. A target that can be changed is a target that will be changed, always in the direction of the current momentum.
They confuse price with thesis. A price level is a market fact. A thesis is a claim about the asset. Selling because of the first while the second is intact is trading, and my record at trading is poor.
What I use instead
Position size rules. If the position exceeds a stated share of investable assets, I trim back to target, on a quarterly date, regardless of price.
This achieves what targets were supposed to achieve. It takes profit during advances and it does so mechanically. But it is expressed as a share of my portfolio rather than as a price, which means it cannot be revised by a market move and it does not require me to predict anything.
Invalidation conditions. What would make me exit entirely, stated as checkable facts about the asset. A successful consensus attack, a change in issuance, a legal change making it unholdable where I live.
None of those is a price.
The difference in practice
A target says: I believe this is worth X.
A size rule says: I do not know what this is worth, and I know how much of it I am willing to hold.
The second is a claim I can actually defend, and it produces the same profit-taking behaviour without requiring a forecast.
The operational note
A rule that fires quarterly needs to be executable quarterly. A working balance at the venue I buy through covers a typical adjustment without touching cold storage, which is the difference between a rule that gets followed and one that gets deferred.
This is a personal account of holding through market cycles. It describes what one person did and why. It is not a recommendation, and past cycles do not predict future ones.