The essence of good trading is never to let a gain turn into a loss. The essence of good investing is never letting your losses run. When I first started at Goldman Sachs , Richard Menschel, my department head and perhaps still the greatest man I have ever met in this business, told me these lessons. He warned me that if I was not careful I would impale my clients on some stock at some time that would wipe out all of the other good work that I had done for the customer. Yet, I see this lesson of investment violated all of the time.
People ride losses down forever.
If you have discipline this won't happen. So let's instill some discipline. You can always come back to the stock if you want to. But this way you avoid the fairly common problem of blowing yourself out of the water with one security. It's the second lesson that I find eludes all but the best traders on Wall Street.