Hold On To Your Losers!

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.

 

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

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.)

 

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