Say the reason in two minutes and write it down. Sell when the reason is gone, not when the price wobbles.
Know why you own it.
Bad news about a share you own. Hold or sell? Swipe.
The news can’t tell you to sell. Only your reason for owning it can.
← Red LinesRed Line 36 of 48 The idea The scene Try it Where it bends This game’s numbersHow strong the proof isDThin proof Where it comes from
A written reason turns noise into a simple question: is my reason still true? A price drop or a loud opinion doesn’t change the answer. News about the reason does.
You own Alfa Tools for its big, steady contract with a carmaker. Shares falling with the whole market, or a pundit saying sell, leave the reason standing. The contract ending removes it.
For anything you hold, write the reason in one line. Put it in your journal and read it when the price scares you.
For an index fund the reason is simply: a bit of everything, for years.
American Banker: Wirecard’s week ends in insolvencyIG: how Wirecard lost nearly all its value in a weekTechCentral: Meta shares plungeReuters via Investing.com: Meta’s record gain, 2024AP: Netflix loses 800,000 US subscribersNetflix: yearly return 2016RCR Wireless: Nokia stock hits 13-year lowMacrotrends: Nokia price historySEC: Kodak 8-K, September 2013Motley Fool: Amazon stock’s historyBlofin: Amazon price history and cycles
A sensible rule from one investor’s book; writing the reason and selling on it, not on price, has not been tested on its own.
- One Up on Wall Street Peter Lynch with John Rothchild, Simon & Schuster, 1989
Checked 2 Nov 2026 · How we grade
- A Strong proof: Many good studies or long official data, from different teams or countries, point the same way.
- B Good proof, with limits: Solid studies agree on the direction, but the size varies, or the data covers few places or few kinds of people.
- C Mixed proof: Some good studies for, some against, or the evidence covers only part of the line.
- D Thin proof: Mostly one book’s argument, one survey or stories. It may be wise, but it has not been tested well.
- = True by the sums: It follows from arithmetic, so no study can overturn it. We still show what real data says.
Peter Lynch, One Up on Wall Street (1989). In our words, not quoted.
See it in numbers: Anchoring · Hindsight (From Zero)
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