There’s an old trading adage that goes like this: “Let your winners rise, and cut your losers”.
Both make sense if you’re a trader. The latter, however, is not something I recommend when you’re a long-term investor.
Regular readers of this blog know that I listen to The Motley Fool’s Rule Breakers podcast, featuring David Gardner, every week. I heard an incredible story on the latest episode…
This guy said that he’s been listening to the Motley Fool for a few years, and he remembered how David says that you should hold on to your losers as well as your winners.
He then told a story about how he bought Spark Therapeutics (NASDAQ: ONCE) some time ago. I’m guessing he bought at a price in the $60 range.
He said that the stock proceeded to go much lower…to the mid $30s.
After that, it managed to make its way to $52.
Then he woke up one Monday morning, and the stock was trading at $120 after being acquired by the Swiss company Roche.
He made all his money back…plus had a nice profit!
That’s why I love stocks.
Click the image of the book at left to be taken to its Amazon page. (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)