No. of Recommendations: 0
A rule of thumb, highly debateable, is that a loss of 2% should be sufficient to get one to drop one's position.

The idea is: the position is losing money, it may lose more money, one gets OUT of the position and waits, if the position continues to spiral downward - great, if the position returns to the good size then one can contemplate getting back in.

Under worst cast conditions, one loses a small delta.

Under best case conditions, one loses a small delta.

Holding onto a losing position as it loses more and more with no limit is ill-advised.

[from one who bought CMGI at about $85 and sold it at about $3...]
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.