Man, it has been a tough year -- and every time I think
things are finally on the right track, something unexpected
happens and derails my hopes yet again.
It's not what you think!
You might be assuming I'm talking about riding shares
of
Goldman Sachs (NYSE: GS) all the way to their
all-time low, only to dump them there, and then watch them
more than triple in value. Or maybe you think I'm talking
about missing out on
Freeport McMoRan 's (NYSE: FCX) big
rebound.
But I'm actually referring to something much more painful
for me personally: watching my beloved Oklahoma Sooners drop
more games in one season than they have in the past
half-decade. Not to mention, lose just about every star they
have to injury, including their Heisman-winning quarterback,
Sam Bradford.
My grandfather played football for Oklahoma, and I've been
a Sooners fan since I was old enough to walk, so I'll
alwaysbe a Sooners fan -- no matter how bad things
get. After all, in sports, sticking by your team through the
ups
and the downsis a virtue. Just ask any Green Bay
Packers fan. (Believe it or not, I'm a Packers fan, too.)
Wall Street is a different ball game
For proof, just ask any longtime "fan" of:
Stock
10-Year Return
Bank of America (NYSE: BAC)
(30%)
Xerox
(67%)
Fifth Third Bancorp (Nasdaq:
FITB)
(75%)
Sirius XM Radio (Nasdaq: SIRI)
(98%)
Data provided by Yahoo!
Finance.
Or ask my fellow Fools
Rich Greifneror
Adam Wiederman. 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.
I, for one, am sitting on a major loss in
Clearwire . If we're being honest, the only
reason I bought shares in the first place was because I liked
that it was backed by
Google ,
Comcast , and a handful of other tech
heavyweights.
Ditch that loser!
One of the "20 Rules for Investment
Success" from
Investor'
s Business Dailyis 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 counsel. 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
when
breaking
IBD's rule actually paid off big-time:
Stock AdvisorPick
Decline After Recommendation
Gain After Re-Recommendation
Netflix (Nasdaq: NFLX)
23%
340%
Quality Systems
14%
1,146% Continued... |