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When to Sell a Stock at a Loss: Why I Finally Sold Intuit
Yesterday, I sold 62 shares of Intuit.
About $18,000 came back.
About $7,000 didn’t.
I had invested roughly $25,000 earlier this year. By the time I sold, I was down around 25 percent.
Losing the money hurt.
But selling was harder.
Buying a stock is optimism. You do your research, build your argument, and imagine the future unfolding the way you expect.
Selling means asking a much more uncomfortable question:
What if I was wrong?
Why I Bought Intuit Stock
The nice thing about writing a blog is that I don't have to reconstruct what I was thinking.
I wrote it down.
Earlier this year, I wrote about why I bought Intuit during the AI panic.
My thesis came from something I knew well: small business.
I own businesses. I use QuickBooks. I know how deeply embedded it becomes once years of invoices, payroll, estimates, customers, bank accounts, and tax information run through it.
When the market started worrying that AI would destroy traditional software companies, I didn't see it that way.
I thought AI would make QuickBooks better.
I still do.
That wasn't where I was wrong.
I was right about QuickBooks. But I bought Intuit.
I Knew QuickBooks. I Thought I Knew Intuit.
Read my original investment thesis and something becomes obvious in hindsight.
I spent a lot of time talking about QuickBooks.
I barely talked about TurboTax.
I understood QuickBooks because I live inside the ecosystem. I could see the switching costs and the data advantage. I could see why AI might make it more valuable to a small-business owner, not less.
But Intuit isn't just QuickBooks.
TurboTax is a major part of the company, and that's where the story hasn't developed the way I expected.
Free alternatives have changed the lower end of tax preparation. Intuit is competing differently for customers. Growth expectations have slowed.
None of that makes Intuit a bad company.
It means it isn't the company I thought I was buying at the price I paid.
When Patience Becomes Stubbornness
I've always thought of myself as a patient investor.
If I still believe in a business, a falling stock price doesn't scare me. It might even be an opportunity.
But there's a danger hiding inside the idea of patience.
Sometimes we call it patience when we're really just refusing to admit something has changed.
I caught myself thinking:
I'll wait until it gets back to what I paid.
But the stock doesn't know what I paid for it.
The market doesn't owe me my $7,000 back.
My purchase price matters enormously to me and not at all to the future value of Intuit.
That realization made the decision much simpler.
How to Know When It's Time to Sell a Stock at a Loss
I don't think there's a formula for knowing when to sell a stock at a loss. But this experience gave me a better set of questions.
Am I selling because the price fell, or because my investment thesis changed?
If Intuit had fallen 25 percent while the business developed exactly as I expected, I might have bought more.
That's not what happened.
Then came an even better question:
If I had $18,000 in cash today, would I use it to buy Intuit?
My answer was no.
That forced me to ask a few more:
What did I originally believe would happen?
What has actually happened?
Which parts of my thesis were right?
Which parts were wrong?
And most importantly:
Am I waiting because I still believe in the business—or because I don't want to realize the loss?
Patience says:
The thesis is intact. Give it time.
Stubbornness says:
I can't sell now. I'm down too much.
I realized I was getting too close to the second one.
So I sold.
The $7,000 Education
Could Intuit go back to $400?
Sure.
Could it fall to $250?
Sure.
I don't know.
More importantly, I don't need to know.
I only needed to decide whether I still wanted my $18,000 invested in this particular business.
I didn't.
And now I don't want to make another mistake by feeling like I need to earn the $7,000 back.
That money is gone.
The $18,000 I have now is new capital. Its job isn't to repair my Intuit investment. Its job is to find the best opportunity I can find from here.
I may even have been directionally right about my original AI thesis. Businesses with proprietary customer data, embedded workflows, and high switching costs may become stronger with AI rather than disappear because of it.
Maybe Intuit simply wasn't the best expression of that idea.
Knowing What You Don't Know
There's one final irony.
I ended my original Intuit piece with a thought I still believe:
Knowing what you really know is enough.
I knew small business.
I knew QuickBooks.
The mistake was allowing that knowledge to give me confidence about parts of Intuit I didn't understand nearly as well.
Selling doesn't erase that mistake. And if Intuit soars from here, that doesn't necessarily make selling a mistake either.
I'd rather judge the decision by whether I looked honestly at the business, recognized that the story wasn't developing the way I expected, and acted on what I saw.
Sometimes knowing what you really know is enough to buy.
And sometimes knowing what you don't know is enough to sell.
“Know what’s enough. Build what matters.”
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