Posted on 3 April 2014 by Douglas ChadwickRecently a subscriber to Saltydog was disturbed to find that the day after he committed to the purchase of a particular fund; the price went up before the trade was completed. He was annoyed with himself that he had not made his decision earlier and felt that he had missed out on the gain. From his frantic description it sounded like he felt he had suffered a “near death experience.” Well, there are a couple of points to be made here. Firstly, would he have been happier if it had gone down in price before the trade was completed. Secondly, he should be congratulating himself that he was climbing onto a fund that was rising. Finally, he should not be greedy and trying to guess the bottom or top of the market, that, as has been said many times before, is a mugs game. A gain of any sort is better than a loss. A much more unsatisfactory situation than the one above is when you do not sell a failing fund even when you know you should. You hold on waiting for it to recover. You quite wrongly feel a loyalty to this fund because perhaps it has served you well in the past, so you continue to perpetuate your loss. Now you have really moved into the no sleep at night arena. Jesse Livermore has a number of quotations that cover these situations..... “A loss never bothers me after I take it. I forget it overnight. But being wrong -not taking the loss -that is what does damage to the pocket book and the soul.” “The only thing to do when a man is wrong is to be right by ceasing to be wrong.” “One of the most helpful things that anybody can learn is to give up trying to catch the last eighth -or the first. These two are the most expensive eighths in the world. They have cost stock traders, in the aggregate, enough millions of dollars to build a concrete highway across the continent.” Baron Rothschild has similar sayings to these from Jesse Livermore and both of these people were highly successful investors at the turn of the twentieth century. It must be worth taking this philosophy on board and to try to operate your portfolio using these maxims.