Sell Discipline - AI Analysis Prompt
Use this John Templeton rule prompt to apply “Sell Discipline” to a specific company. It turns a vague opinion into a repeatable checklist: what facts you must verify, which assumptions matter most, what would invalidate the thesis, and the common misreads that create false certainty. Expect a written output you can save: a thesis summary, key risks, and next-step questions for filings and earnings calls. If a claim matters, require primary-source citations before you act. Educational only — not investment advice.
Full Prompt
You are an investment analyst trained in John Templeton's principle of "Sell Discipline." Your core philosophy: global contrarian investing, maximum pessimism, spiritual approach. Your task is to analyze {Company Name} through the specific lens of this principle.
## Context
John Templeton teaches: "The time to sell is before the crash, not after. Sell when optimism is at its peak and better opportunities exist elsewhere."
## Analysis Framework
### 1. Principle Application Assessment
- How does this principle specifically apply to {Company Name}?
- What aspects of the company are most relevant to "Sell Discipline"?
- Rate the company's alignment with this principle: Strong / Moderate / Weak
- What would John Templeton focus on first when evaluating this company?
### 2. Quantitative Evidence
- Identify 3-5 key financial metrics most relevant to this principle
- Analyze these metrics over the past 5-10 years for {Company Name}
- Compare with industry peers and historical benchmarks
- Are the numbers improving, stable, or deteriorating?
- What story do the numbers tell through the lens of "Sell Discipline"?
### 3. Qualitative Deep Dive
- Evaluate the non-quantifiable factors John Templeton would examine
- Management quality and alignment with this principle
- Industry dynamics and competitive position
- Business model sustainability viewed through this specific lens
- What would John Templeton want to know that isn't in the financial statements?
### 4. Risk Assessment Through This Lens
- What risks does this principle specifically highlight for {Company Name}?
- What could go wrong that this principle is designed to protect against?
- Are there warning signs that John Templeton would flag?
- Stress-test: How would this company perform under adverse conditions?
- What is the worst-case scenario from this principle's perspective?
### 5. Opportunity Identification
- What opportunities does analyzing through this lens reveal?
- Are there hidden strengths the market may be undervaluing?
- How does this company compare to John Templeton's ideal investment?
- What catalysts could unlock value related to this principle?
### 6. Templeton Verdict
- Summarize: Does {Company Name} pass the "Sell Discipline" test?
- Rate the investment opportunity: 1-10 from this principle's perspective
- Clear recommendation: Buy / Hold / Avoid (based on this principle alone)
- What conditions would change your assessment?
- One-paragraph summary capturing John Templeton's likely assessment
## Output Format
Present your analysis with specific data points in each section. Use John Templeton's analytical style: global contrarian analysis buying at points of maximum pessimism. End with a decisive verdict.Related reading (close the loop)
Pick one path below to turn the output into a checkable, repeatable decision policy.
- Read the matching principleDefinition, boundaries, pitfalls, and a minimal checklist.
- Master profileMethodology summary + common misreads for this framework.
- Practice in scenariosTranslate conclusions into “what I do under stress”.
- More prompts from this masterTriangulate with multiple rules instead of anchoring on one prompt.
Educational only. Verify facts with primary sources and apply your own constraints.
Basic Questions
Why is sell discipline harder to execute than buy discipline?
Core idea: establish strict selling discipline, unaffected by emotions
✅ Using this AI prompt, you can systematically analyze any company or investment opportunity from this principle's perspective.
The prompt guides you to:
1. Assess whether the investment target meets this principle's core requirements
2. Identify key risks and blind spots
3. Provide a 1-10 comprehensive rating
Start by analyzing companies you know well for practice, then apply the framework to new investment decisions.
✅ Using this AI prompt, you can systematically analyze any company or investment opportunity from this principle's perspective.
The prompt guides you to:
1. Assess whether the investment target meets this principle's core requirements
2. Identify key risks and blind spots
3. Provide a 1-10 comprehensive rating
Start by analyzing companies you know well for practice, then apply the framework to new investment decisions.
Usage Tips
Is the AI's 1-10 rating reliable?
⚠️ The sell discipline score's most critical function: helping you overcome the "disposition effect" — selling winners too early and holding losers too long.
The rating's unique value:
- Templeton's selling wasn't "sell when it's up" but "swap when you find something better" — the score helps quantify the "better" standard
- A high score shows you have a clear sell framework, not driven by emotions
- A low score reveals you may lack systematic sell rules, making sell decisions too arbitrarily
Templeton's sell philosophy:
- When a stock's price fully reflects good news and you've found another good company whose price is severely undervalued — that's the time to swap
- Selling isn't admitting defeat; it's optimal reallocation of resources
- AI can compare expected returns of holding vs. alternatives, but the final action requires overcoming your psychological inertia
The rating's unique value:
- Templeton's selling wasn't "sell when it's up" but "swap when you find something better" — the score helps quantify the "better" standard
- A high score shows you have a clear sell framework, not driven by emotions
- A low score reveals you may lack systematic sell rules, making sell decisions too arbitrarily
Templeton's sell philosophy:
- When a stock's price fully reflects good news and you've found another good company whose price is severely undervalued — that's the time to swap
- Selling isn't admitting defeat; it's optimal reallocation of resources
- AI can compare expected returns of holding vs. alternatives, but the final action requires overcoming your psychological inertia
Getting started
Does this prompt give investment advice or buy/sell calls?
No. It is a research helper that turns your thinking into checkable inputs and constraints: what evidence you must verify, what would prove the thesis wrong, and what common misreads to avoid. Treat the output as a draft, not a signal. Validate every material number against primary sources (filings, earnings releases, investor presentations, transcripts), and do not act unless you can write down (1) position-size limits and (2) explicit invalidation triggers.
What inputs should I provide for a reliable result?
At minimum: a 1-sentence business model summary, your current thesis (why it wins/loses), time horizon, and risk constraints; a valuation/price range; and the latest financial statements (profit quality, cash flow, debt/liquidity). Add context that reduces hallucinations: the exact filing period, known one-offs, key competitors, and what you do NOT know yet. If an input is missing, label it as missing evidence instead of letting the model guess.
Validation and boundaries
How do I validate the output?
Validate falsifiable claims one by one. Rewrite each key statement into something you can check: the metric, the period, and the source. Numbers must match filings; management claims must be traceable to transcripts/guidance; and “moat” claims need observable evidence (pricing power, retention, switching costs, cost structure). Anything you cannot verify becomes a follow-up task, not a decision trigger. If the model cites dates, confirm they are not beyond its knowledge cutoff.
When should I NOT act on the output?
If you cannot write down invalidation triggers, a position-size cap, or primary-source evidence for the key claims behind “Sell Discipline”, do not act. The safer move is usually to reduce size, slow down, and schedule the next review.
More Rule Prompts
Explore other investment principles from this master.
Flexibility
It is impossible to produce superior performance unless you do something different from the majority. Be flexible in your approach.
→Research-Based Investing
Never buy a stock without thorough research. Know what you own and why you own it.
→Patience and Perseverance
The only investors who shouldn't diversify are those who are right 100% of the time. For the rest of us, patience and diversification are key.
→Humility in Investing
An investor who has all the answers doesn't even understand the questions. Humility is essential for long-term success.
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