How I lost $5k to save $15k

Have you heard of Rule #1? For those of you who don't know it was made famous by no other than my idol Warren Buffett. He basically said that rule #1 in stock investing is "Don't lose money." and rule #2 is "Don't forget rule #1." It sounds simple enough and yet cutting losses is probably one of the hardest thing to do in stock investment and I am guilty of often violating this rule #1 myself too. One of the things I do routinely every night is to read the IBD (Investor's Business Daily) that I subscribe to. For anyone who reads IBD you know of all the investment advises they give cutting losses at 7 % to 8% is the rule they stress on the most. The reason of cutting loss early is because it is much easier to make it back. If you wait until your stock is down 15%, 20% or even 50% it would be much harder to recover from it. The stock market has been dropping badly in the past 2 weeks of trading. I was forced to close my position at a loss of 7% on two of my recent purchases. I lost about $5,000 and I was kind of upset about it. Now that when I look back, I'm glad that I did what I did. If I were still holding on to those stocks my loss would have been magnified to $15,000! Although I still consider myself to be a "buy-and-hold" investor as I do not move in and out of a stock to make tiny profits. In today's chaotic market we all need to move quickly to cut loss and protect our capital, and hence following the rule #1 "Don't lose money."