Chart of The Day - Netflix Downfall

Take a loom at the Netflix chart courtesy of Bespoke.  I can recall many a hedge fund manager shorting the stock on the way up and eventually got out because the pain was just too much.  It goes to show that even the best of investment strategies no matter how sound must be able to stay solvent which at times is not as long as the market is willing to bear.

How Quickly the Mighty Can Fall

• From its IPO price of $7.50 to its closing high of $298.73 reached on July 13th of this year, the stock was up 3,883%.  Since July 13th, the stock has fallen from $298.73 to its current price of $66 -- a decline of 78%. 
• There's a common market saying that "you should never become married to a stock."  There's no doubt that there are a large number of investors out there who are married to NFLX and have riden it all the way down because they just can't divorce themselves from it.  The proper play is to set a stop price to sell the stock at a certain threshold (5%, 10%, 20%, etc.) that takes all emotion out of the trade.  If it's too difficult to stick with your set stops, then trading just might not be for you.