It seems they use the 7% to 8% loss point to jump out of a stock. That seems like good advice to me. They say:
The primary rule of investing is to sell a stock if it falls 7% to 8% below your buy point. This kind of attitude takes discipline, plus the ability to suppress your ego for the sake of your portfolio.
That is why you just make a stop at that point so you don't have to think about it. Your ego doesn't even get involved at all. I have been doing this for some time and it works for me.
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