A friend of mine has invested 70% of his capital into three stocks. He is short on all three. He placed the trades sometime in the last week or two. Currently, in aggregate he is a little more than 20% down. I believe it was two days ago when he was a mere 7% down. I say mere, because a few days before that he was 18% down. When he was 7% down I asked him what he was going to do. He said he might sell half, so he would aleviate a little of the stress from being in losing positions. He didn't. I'm not sure what he thinks about that decision today. This is the same friend who laughed when I told him about another friend who lost 65 million over the course of the tech crash. "Why didn't he sell!" he said. "He knew at 55 he should have gotten out! surely at 45! at 10, he probably didn't care anymore, but he probably cared again when it hit 5 million!" (that stock is worth 300k today.) He laughed at that story, but now he's sitting on a significant loss, and he's convinced the market will fall again. Convinced as much as this other friend was who thought the market would go back up. He's drawn the trend lines, he's analized the market sentiments, he's convinced the market will do what he expects. Meanwhile, he clings to his antacid like a drowning man clings to a raft. My feeling is he should have stopped out when he realized his timing was wrong -- when he was down a set percentage of his equity -- his predetermined risk. This friend has made a lot of money by riding though situations like this before, so he is adamant about staying in. I hope he's right, but you know what happens when you start to hope... I need to ask him what he'll do if he reaches 25% down, and then 30. I wonder if he's capable of stopping out with losses that great. We'll see.