[[Start here]] → [[What works in stocks?|what works]] → [[maintain your discipline|discipline]] → don’t hold losing positions --- The book “[The Art of Execution](https://www.amazon.co.uk/Art-Execution-worlds-investors-millions-ebook/dp/B0153LKGFE/)”[^1] by Lee Freeman-Shor has a useful model for what to do with losers. He studied the results of many fund managers over a multi year period. He identified the habits of fund managers handling losing positions and classified them as assassins, hunters and rabbits. - **Assassins** - those that act quickly and cut their losses on losing positions. - **Hunters** - those that bought more, averaging down when prices fell. - **Rabbits** - those that did nothing on losers. Stuck in the headlights. He found that out-performing fund managers were decisive - either Assassins or Hunters - whereas Rabbits were consistent under-performers. So you only really have two options when you are present with a loss. **Cut losses or average down. Doing nothing is not an option.** Of course, as an amateur investor, your ability to identify the right stocks to average down on maybe more limited. It's very easy to be extremely overconfident or even a limited amount of research. You may well be wrong. Not only this, but if a share price falls, it has negative momentum and a large number of investors will have regretted their purchase at higher prices. These present headwinds to share price recovery. This is why I personally believe taking an assassin approach is more sensible for many investors. [^1]: [[Freeman-Shor - The Art of Execution]]