Just when I thought it couldn't get any worse ... 2009 hit and proved me wrong yet again. And frankly, I just don't know how much longer I can take it.
It's not what you think !
You might be assuming that I'm talking about the major losses I took in both Goldman Sachs (NYSE: GS) and NYSE Euronext (NYSE: NYX). But I'm actually referring to something much more painful for me personally: college football.
You see, my grandfather played football for Oklahoma, and I've been a Sooners fan since I was old enough to walk. So it was nothing short of devastating to watch Oklahoma lose its fifth straight BCS bowl game -- and its third straight national championship game -- to Saint Tebow and team this January.
Of course, I'll always be a Sooners fan, even though they're now the Buffalo Bills of college football. After all, in sports, sticking by your team through the ups and the downs is a virtue. Just ask any Green Bay Packers fan.
Wall Street is a different ball game
For proof, just ask any longtime "fan" of:
Stock
10-Year Return
General Electric (NYSE: GE)
(55%)
Dell (Nasdaq: DELL)
(63%)
Intel (Nasdaq: INTC)
(36%)
Comcast (Nasdaq: CMCSA)
(39%)
Data provided by Yahoo! Finance.
Or ask my fellow Fool Rich Greifner. Or even ask Jim Cramer. In his book Real Money, Cramer reminds investors, "This is not a sporting event; this is money. We have no room for rooting or hoping."
Yet it happens all the time. Investing message boards are full of desperate investors who hope some cash-rich behemoth will come along and save their decades-old American superbrand. But as Circuit City investors found out, this is often a losing bet -- especially in this credit-strapped market.
Others ride stocks all the way into the ground because they're emotionally attached to the company's story, products, or management -- and meet with similarly dismal results. Take Vonage (NYSE: VG) investors as an example.
Ditch that loser!
One of the "20 Rules for Investment Success" from Investor's Business Daily is to "cut every loss when it's 8% below your cost. Make no exceptions so you'll avoid any possible huge, damaging losses."
To a sports fan, that advice might seem cruel and unusual, but it's actually good investment advice.
Or is it? To find out, I dug through David and Tom Gardner's Motley Fool Stock Advisor picks. They often re-recommend a stock even after a big run-up -- or a sharp fall. I actually found three examples where breaking IBD's rule actually paid off big-time:
Stock Advisor Pick
Decline After Recommendation
Gain After Re-Recommendation
Netflix
23%
238%
Quality Systems
14% Continued... |