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No. of Recommendations: 1
As hard as it was to do it, I went with the "If you were buying with new money today, would you ever buy this stock?" approach. I wouldn't, so I ditched it in favor of another.

That should be the ONLY approach. If you don't like the company's chances anymore, sell it (take the CG loss if you qualify, but don't let the absence of that stop you) and buy something you believe in.

Now, say you do still believe in the stock. THEN it would be more beneficial to keep your devalued shares, because from this point forward you would be better off making that money back, than an equal amount back on a new stock (which you'll owe capital gains on.)

It all comes down to believing in the stock, NOT holding on because you can't stand to admit you were wrong.

- Tom
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