Sabman, no one has all the answers. A lot of people would say...

Sabman, no one has all the answers. A lot of people would say it's never wrong to take a profit. Others might say you should always sell if you feel uncomfortable (for any reason). From where I sit you did the right thing by selling, based on your comfort levels. And as it turned out, you timed the sale almost perfectly. If it had gone up, you still would have the done the right thing.

IMO what is really important is that you understand, as much as you can, the stock so that you can work out in your own mind what the true worth is. Then you can make an informed decision.

As for "over-reaction" - well, now you are talking about short-term sentiment vs long-term value. All I would say on this point is that markets can over-react for longer than you expect (in both directions). So if you do decide that the share price is now good value (based on your own independent analysis) don't get freaked out if the price keeps going down. Conversely if you still think the share price is over-valuing the company, don't be surprised if the share price starts going up.

Finally (sorry for the essay) remember that you don't know everything, and nor does anyone else. Mistakes are inevitable. Be prepared to swallow your pride and change your mind if new information comes to light.

I trust the management of this company to keep growing the bottom line. I think it has good market share and brand awareness. I think profitability will go up and down based on cyclical factors and factors outside the management's control. No matter, for me it's a long term hold until something fundamental changes.