Six Steps to Better Stop Losses

Editor's Note: This column by Rob Martorana is a special bonus for TheStreet.com and RealMoney readers. It appeared on Street Insight on March 3. To sign up for Street Insight, where you can read Martorana's commentary in real time, please click here.

My obsession with stop losses began in 2002 when I was a portfolio manager at Barclays. We held Omnicom (OMC) for both our discretionary and advisory accounts, and one morning in June the stock began to sink.

It broke through key support levels while other media stocks were quiet, so our media analyst got on the phone. He discovered that a rumor of an accounting scandal was breaking, but it had not yet made it into the media. So some people knew and some people didn't. We recommended that our advisory accounts sell the shares immediately. ...