I was chatting with a friend of mine earlier about business. We were having a laugh over the fact that most people will listen, or agree with whomever seems most confident about what they say. It's very interesting that we do this. The real question is why?
I guess it might be the fact that we want to be sure about things...like investments, decisions, whether something is cool or not, etc. And, because we really don't like to research to much, or spend time looking for valid information through the endless virtual heaps of knowledge. So instead we listen to the most confident voice around, whether that be a friend, boss, media, or whatever.
Which brings up something else. Cutting your losses. Cutting your losses, means pulling out of or quitting something that once brought you benefit, but no longer is doing so. For example, today it was reported (cnnmoney.com) that Angelo Mozillo, chairman of Countrywide Financial (largest mortgage company in U.S.) sold off over half of his stock the company he owns. He cut his losses. Cashed in on the value of his stock...it had lost over 50% over the past year.
Cutting losses isn't just something in the financial sector. Here's a more common example most of us can relate to. Relationships. Most of us have been, or know of couples that stay together long after all the pleasure or benefit has ended. Why? When do you know when to cut your losses(stop the bleeding,so to speak)? I think few can respond matter-of-factly.
The problem begins when we start using hope as a strategy...instead of information, intelligence, and strategy. My suggestion would be to start thinking about cutting your losses and abandoning the current route as soon as hope is becoming more and more the primary tool for your decision making. This requires uber-descipline, a high self value, and a willingness to move forward and begin designing the new patterns of your life...financially or socially....
-Angel Armendariz
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