Just bought my 1st 2 stocks

[buffett]

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The concept of "stop-loss" is irrational.


[/ QUOTE ]

He's right. Here's a quote from Ben Graham:

"In the old legend the wise men finally boiled down the history of mortal affairs into the single phrase, 'This too shall pass.' Confronted with a like challenge to distill the secret of sound investment into three words, we venture the motto, MARGIN OF SAFETY."

So if you think CAKE is worth $35, don't pay $35 for it. Don't even pay $30 for it. Wait until it gets to such a low price ($25 for some, $20 for others, depends on taste) that the probable downside from there won't hurt as much. Sure, as 1C5 said, you may be wrong and the stock may drop to 50% of its value. But the fall from 25 to 17.50 is much smaller than from 35.

One of the greatest investors of today is Mohnish Pabrai. When he bought Tesoro, he first paid $7.50 (because he thought it was worth, conservatively, $15). He bought it all the way down to about $2, and he sold it at $15. It's now at $57.

You're never going to get the absolute bottom, and you're never going to get the absolute top. But if you invest with a margin of safety, you can strive to be as good as Mr. Pabrai (whose annualized after-fee returns are in the neighborhood of 32% for the past 6 years or so).
-web