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No. of Recommendations: 1
First of all, there is no excuse for holding a stock that goes down 40%, or even close. You should monitor your holdings carefully, and sell when something begins to decline. The 21 day EMA is a good guide. If it is above its 21 day EMA is is probably good, unless you think it is way too extended. Of course, if it goes down 40% in one day, you are pretty much out of luck.

So far as a % of portfolio is concerned, it really depends on how much money you have. A good rule that some have is about $10,000 per stock at least, and (if possible) at least 10 stocks.
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