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What is Cut And Run?

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Cut and run is a quick but expensive retreat. It is an analogy to an 18th century sailing term meaning to cut an anchor free in order to quickly set sail. As a modern strategy, cut and run is associated with dire situations that require a retreat whatever the cost. The following are hypothetical examples.


An investor buys a stock based on its earnings and dividend. The price falls dramatically. The investor digs a little deeper and finds that the firm has an enormous debt relative to its book value. The investor decides to accept a large loss to avoid the risk that the firm will go bankrupt.


A young professional takes a new job and quickly finds that the hours are extremely long and the environment is toxic. Their quality of life plunges and they suddenly feel stressed much of the time. With little hope of improvement they decide to move on, despite potential negative impact to their resume and finances.
Overview: Cut And Run
A quick but expensive retreat.
Escaping from a dire risk or facing up to a failing strategy before its too late for recovery.
It should be noted that cut and run is often used with negative connotations. For example, the term is commonly used in politics to suggest an irresponsible retreat.
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