It's all very well being able to pick a stock that's about to go through the roof – and sometimes, to be honest, it isn't all that difficult as long as you use the tools I've been showing you in this book. But there's more to the art of investing than simply picking winners. You also have to be able to tell which shares are going to be losers – and, no less so, which of your former winners are about to turn into losers.
I'm going to confess that I've sometimes lost profits that I thought were safely in the bag, because I was too slow to recognise the signs that a company's fortunes were on the turn. Sometimes that happened because I simply failed to notice something important that was going to affect the company in an adverse way. But sometimes it was because my pig-headed pride stopped me from acknowledging that I'd been holding on too long, and that it was going to be all downhill from here.
For instance, I might say to myself: 'Look, the stupid market's got this share all wrong. Its price has been hammered beyond all rhyme or reason, but it was a good share when I bought it and it's still a good share now. All I've got to do is hold tight for a while and wait for the rest of the world to recognise its true value.'
Or: 'Yes, I do realise that the good times are over for this company, but yesterday's price fall was really a bit overdone. I think I'll wait a few days, and maybe it'll have bounced a bit so that I can sell ...