Page 378 - How to Make Money in Stocks Trilogy

When You Must Sell and Cut Every Loss . . . without Exception 253

really studied to learn whether what they’re doing is right or wrong. They
haven’t studied in enough detail what makes a successful stock go up and
down. Luck has nothing to do with it, and it’s not a total mystery. And it cer-
tainly isn’t a “random walk” or an efficient market, as some inexperienced
university professors formerly believed.
It takes some work to become really good at stock selection, and still
more to know how and when to sell. Selling a stock correctly is a tougher job
and the one that is least understood by everyone. To do it right, you need a
plan to cut losses and the discipline to do this quickly without wavering.

Forget your ego, swallow your pride, stop trying to argue with the market,
and don’t get emotionally attached to any stock that’s losing you money.
Remember: there are no good stocks; they’re all bad . . . unless they go up
in price. Learn from the 2000 and 2008 experience. Those who followed
our selling rules protected their capital and nailed down gains.
Those who did not have or follow any selling rules got hurt.