“Cut your losses (short) and let your profits run” is an old Wall Street adage, cited in print from at least 1837. The proverb is frequently attributed to British economist David Ricardo (1772-1823).
     
 
Wikipedia: David Ricardo
David Ricardo (18 April 1772 – 11 September 1823) was an English political economist, often credited with systematizing economics, and was one of the most influential of the classical economists, along with Thomas Malthus and Adam Smith. He was also a member of Parliament, businessman, financier and speculator, and amassed a considerable fortune.
 
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The great metropolis,
by the author of ‘Random Recollections of the Lords and Commons’.
By James Grant
1837
Pg. 81:
As I have mentioned the name of Mr. Ricardo, I may observe that he amassed his immense fortune by a scrupulous attention to what he called his own three golden rules, the observance of which he used to press on his private friends. These were, “Never refuse an option when you can get it,”—“Cut short your losses,”—“Let your profits run on.” By cutting short one’s losses, Mr. Ricardo meant that when a member had made a purchase of stock, and prices were falling, he ought to resell immediately. And by letting one’s profits run on he meant, that when a member possessed stock, and prices (Pg. 82—ed.) were rising, he ought not to sell until prices had reached their highest, and were beginning again to fall. These are, indeed, golden rules, and may be applied with advantage to innumerable other transactions than those connected with the Stock Exchange.
 
3 May 1876, Newport (RI) Daily News, “Rules for Farmers,” pg. 4, col. 1:
You can thus have the satisfaction of knowing that you are carrrying out Ricardo’s two famous rules for acquiring wealth, namely:
1. Cut short your losses.
2. Let your profits run on.
—Country Gentleman.
   
20 July 1895, Stevens Point (WI) Daily Journal, pg. 3, col. 1:
“‘Cut your losses, let your profits run’ is our old wheeze; but it’s no good being too hasty.”
(From St. James’ Budget—ed.)
   
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The Story of the Stock Exchange: Its History and Position
By Charles Duguid
London: G. Richards
1901
Pg. 118:
Their confidence in David Ricardo was justified by his early successes in business. To him is attributed the statement of the speculative formula, ” Cut your losses and let your profits run ” ; and it is said that he put his formula into practice.
   
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Cordingley’s Guide to the Stock Exchange:
Being an Explanation of Every Mode of Speculating in Stocks and Shares, and Illustrating the Manner in which Transactions are Carried Out
By William George Cordingley
Published by E. Wilson
1901
Pg. 84:
A maxim of one of our successful speculators was, “Cut your losses, but let your profits run.”
 
10 February 1901, New York (NY) Times, pg. 14, col. 6:
“Just the reason,” Mr. Cammack replied, “why you should play the market on the bear side: you’d take your profits and cut your losses short.”
     
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The A B C of Stock Speculation
By Samuel Armstrong Nelson
New York, NY: S.A. Nelson
1903
Pg. 48:
The maxim “let your profits run, but cut your losses short” has received the approval of most of the great stock operators. The authorship of the maxim has been credited to a dozen people, and most of them would have been willing to father it, although the great fortunes in stocks have not usually been made by people who give stop orders.
 
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February 1910, The Ticker and Investment Digest, pg. 173:
You cut your losses short and let your profits run.
     
14 August 1913, New York (NY) Times, “Topics in Wall Street,” pg. 10:
The more experience a speculator has had in Wall Street the more ready he is, as a rule, to accept a loss. “Cut your losses and let your profits run” is a Street proverb that is always cited to beginners, but which is only accepted by them in respect to letting their profits run.
   
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Investment and Speculation:
A Description of the Modern Money Market and Analysis of the Factors Determining the Value of Securities
By Thomas Conway and Albert William Atwood
New York, NY: Alexander Hamilton Institute
1914
Pg. 124:
The maxim “Cut your losses — let your profits run” is as old as speculation itself, but probably not one per cent of speculators have the courage to follow it.
 
30 September 1916, Winnipeg Free Press, pg. 23, col. 4:
Cut your losses and let your profits run is a pretty good working axiom.
 
17 November 1929, New York (NY) Times, “Topics in Wall Street,” pg. N8:
A Test of Wall Street Maxims.
The events of the past three weeks have made havoc with numerous old Stock Exchange adages. One of the best-known maxims of Wall Street commission houses, both before the war and in the subsequent period, was “Cut your losses and let your profits run.” The advice went wrong both ways in the recent readjustment. The people who let their profits run to the limit were conspicuous in the agitated group which has been throwing over “distress stock” this month. The people who undertook to cut their losses, by fixing a sufficiently distant “stop order,” repeatedly found their stock sold “at the market” when prices were engaged in a perpendicular decline, thereby involving sale on disastrous terms. One other old Wall Street adage, which in some ways (but not in others) seems to apply to recent experience, is the remakr of an old-time commission broker that “customers will forgive their broker a thousand times for getting them into a deal in which they lost money, but they will never forgive him for keeping them out of a deal in which they might have made it.”
 
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The Works and Correspondence of David Ricardo: Biographical Miscellany
By David Ricardo
edited by Piero Sraffa and Maurice Herbert Dobb
Published by Cambridge University Press
1955
Pg. 73:
There is a tradition that Ricardo’s successful dealings rested upon a scrupulous attention to what he called his “golden rules”, namely; “Cut short your losses” and “Let your profits run on”.*
*The wording above is quoted from J. Grant’s The Great metropolis, London, 1837, Second Series, vol. II, p. 81. Later writers often repeated them in varying forms, e.g. C. Duguid, The Story of the Stock Exchange, London, 1901, p. 118. Grant also mentions a third rule, “Never refuse an option when you can get it”. This has not been taken up by later writers; it is obviously incomplete, and indeed does not make sense in the absence of any reference to the price of the option.