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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75381  
Subject: Re: chasing losses Date: 5/20/2012 4:15 PM
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Most people tell you that doubling down is a bad idea. If the stock has declined by your loss limit (usually 10 to 15%), you are better off to admit that your timing was wrong on this stock and sell. Then buy something with better prospects.

Value investors who buy stocks that they think are undervalued, have a different situation. If it was a good buy before, its a better buy now. But if the price is going down, how low will it go?

Growth investors will sometimes double down but only after careful thought about it.

If it was supposed to go up and didn't usually you want to sell. But did you give it enough time? When will earnings be reported next? Will they be good?

Usually holding losers is a mistake. Sell and buy something better.
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