Jesse Felder – Don’t Rationalize a Lousy Trade

<p><strong>BIO: </strong>After starting his career at Bear Stearns and then co-founding a multi-billion-dollar hedge fund firm, Jesse Felder left Wall Street to focus his energies on research and writing. Today he publishes The Felder Report and hosts the Superinvestors podcast.</p><p><strong>STORY:</strong> Jesse found a cigar butt stock that was cheap and performed extraordinarily well in just a few months after he took a pretty sizable position. A friend convinced him to hold the stock long-term instead of short-term as he had planned. Government legislation affected the business, and Jesse lost about 50% of his investment.</p><p><strong>LEARNING:</strong> Don’t rationalize a bad trade; get out. Be very careful when you’re in a situation that’s being primed by the government.</p><p>&nbsp;</p><blockquote class="ql-align-center"><strong>“When you’re in a situation that’s not working out as you would hope, rather than dig the hole deeper, move on and find something different.”</strong></blockquote><blockquote class="ql-align-center">Jesse Felder</blockquote><p>&nbsp;</p><h2>Guest profile</h2><p>After starting his career at Bear Stearns and then co-founding a multi-billion-dollar hedge fund firm, <a href="https://www.linkedin.com/in/jessefelder/" rel="noopener noreferrer" target="_blank"><strong>Jesse Felder</strong></a> left Wall Street to focus his energies on research and writing. Today he publishes <a href="https://thefelderreport.com/blog/" rel="noopener noreferrer" target="_blank">The Felder Report</a> and hosts the <a href="https://thefelderreport.com/podcast/" rel="noopener noreferrer" target="_blank">Superinvestors podcast</a>.</p><h2>Worst investment ever</h2><p>About 10 years ago, Jesse came across an idea that seemed to tick all the boxes for a cheap stock. It looked really compelling. The company was Corinthian College, a for-profit college in the US. The company was a reputable business and had excellent profit margins. The stock was trading about three times the cash flow.</p><p>From a technical sta