Royal Mail: sell now, or buy more? Chris White, the head of UK equities at Premier Asset Management, said: "Initially fund managers were sceptical about Royal Mail but I now think there's a strong case for holding the shares for the next two or three years. There should be growth in its sales from deliveries of online shopping while the potential £500m windfall from selling off surplus property offers investors that all-important buffer of safety. He added: "Some analysts don't expect Royal Mail to be debt free before 2017 but I think property sales could bring the date forward to 2015 or 2016. It then has the option of paying special dividends or buying back shares - both are supportive of holding the shares over the medium term. Buybacks help investors because profits are distributed among a smaller number of shares, which should in time mean higher dividends. But Mr White said there were risks. First, the company has high overheads, especially from its large workforce, who could also disrupt the company and its profits by going on strike. Then there is the risk that politicians will interfere. Labour has said it would not try to renationalise Royal Mail but it could still, for example, legislate for a price freeze along the lines that Ed Miliband has pledged to impose on the energy firms. When would Mr White sell? We plan to hold for two or three years - it's hard to see what the growth prospects are further ahead - so I'm not looking to sell right away. But if the shares went above 450p or 500p I suppose you would have to start looking at it. Even the higher of those prices is not unrealistic, according to another manager. "The current target price, based on our model of the business, is north of £5," said the manager, who declined to be named. That is assuming only a small improvement in profit margins from current levels. By 2015 this business should be making more than £500m of profits. The current figure is nearer £400m. He agreed that Royal Mail could pay off its debts more quickly than expected. "I think the main focus will be on repaying the current debt pile of £1bn, but because the company is generating so much cash it should have almost no debt by 2016," the manager said. If you do want to sell, how do you go about it? If you bought directly from the Government via its website, it's best to sell the same way. For a limited period the cost will be 0.75pc of the value of the shares, subject to a £7.50 minimum. Thereafter the cost will be 1pc, with a £17.50 minimum. Anyone who bought from a stockbroker needs to sell via the same broker. Charges vary, but expect to pay between £10 and £20 for the sale. Forgotten BP's Black Monday? The hype around Royal Mail has sucked many people into the stock market who have never been there before. The message they heard was: everyone is buying the shares, the price is bound to go up when trading starts for real on Tuesday. We've been here before. The first big privatisations of the Thatcher era were also "priced to go" - pitched to make an immediate profit. People started seeing them as an easy route to free money and enthusiastically backed BP when its shares went on sale in October 1987. Then, right in the middle of BP's privatisation, disaster struck: "Black Monday." Shares on Wall Street fell by 25pc in a day and London saw two successive falls of 10pc. It was obvious that as soon as BP's shares started trading their price would fall below what investors had paid in the flotation. But many private investors, almost certainly the first-timers, carried on applying for shares in the float - setting themselves up for an immediate loss. Anyone who bought Royal Mail shares through the official flotation website, which does not allow trading until Tuesday, will be relieved if Black Monday is not repeated the day after tomorrow. 'I can't wait to buy more' Carl Lamb may be a financial adviser but like hundreds of thousands of ordinary investors he put in an application for Royal Mail shares. "What attracts me is the dividend," he said. I applied for £10,000 worth of shares but will get just £750. I will buy the rest as soon as I can on the open market and would pay up to 450p a share. Mr Lamb is very positive about Royal Mail's prospects and plans to hold the shares for the long term in his self-invested personal pension (Sipp). "The parcels business can only go from strength to strength," he said. The internet has changed our lives and it can change Royal Mail too. He is not worried about the threat of industrial action. "It was a very astute move to give the employees 10pc of the shares," said Mr Lamb, the managing director of Almary Green.