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Rule 17: Check Hope at the Door

When I hear the word "hope," as in,
"I hope that doomed stock du jour will come back to where I bought it, so I can sell it,"
I get furious.

Always remember: Hope is not part of the equation.

Don't "hope" for anything.

Hope is emotion, pure and simple.

And this is not a game of emotion

Yet, I hear "hope" more than any other word, particularly with troubled tech stocks.

Those stocks are filled with hopeful people betting that something good eventually will happen that will drive the stocks higher.

Hoping and praying are excellent things in religion.
They are integral to sports.
You know that the coaches of some of these come-from-behind NCAA men's basketball teams keep players motivated through hope.

But hope is a mistaken emotion in our business.
It supplants reason,
it supplants rigor -- especially when it comes to low dollar-amount stocks.

No company ever set out to have a low-dollar-amount stock.

Companies fight like heck not to have them.

When they have them, it is a judgment rendered by the market that is harsh,
difficult to accept
and ultimately, far more right than wrong.

When you suffuse your thinking with hope,
you end up holding on for something that most likely will never occur.

Cut your losses and move on.

Remember, we don't care where a stock has been, we care where it is going,

and it is most likely headed down if you are hoping.

Action Alerts Plus portfolio manager and TheStreet's founder Jim Cramer has learned a lot over his 30+ years of investing. So he created a list of 25 Rules for Investing that can help you avoid the novice pitfalls that even he fell into on occasion.

Like hoping that doomed stock you bought will come back.

Rule 17: Check Hope at the Door

But hope is not part of the equation, says Cramer.

So don't "hope" for anything. "Hope is emotion, pure and simple....And this is not a game of emotion," he says.

So save the hoping and praying for your religion and listen to Cramer talk about Rule #17.  Because "remember, we don't care where a stock has been, we care where it is going, and it is most likely headed down if you are hoping."

Watch now!

And don't forget, we are rolling out one-rule-a-day until we get all 25 rules out! So stay tuned!

Sign up and watch Jim Cramer's 25 Rules For Investing here!

 

And for more Investing Rules, watch these: