The telltale sign you’ve fallen in love is when you begin to suffer “loss aversion” – a reluctance to accept losses. Loss aversion is a capital killer because not only does it slowly erode your capital, but you also incur the opportunity cost of another investment that could make you money.

Countless lithium companies have watched on as their share prices were decimated this year. Market darling Core Lithium has fallen 60 per cent. Lake Resources is down more than 70 per cent, and Argosy Minerals is down 55 per cent, while AVZ Minerals has been in suspension for more than a year.

Even Gina Rinehart has failed to escape the rout, with her investment in Vulcan Energy falling 46 per cent after a 40 per cent drop in 2022.

Much like the dotcom bubble (and dare I say it, the current AI bubble), the white gold rush saw every speculative mining company – from gold to copper and iron ore players – jumping on the lithium bandwagon.

Perhaps one of the most bizarre pivots I’ve seen recently was that of ASX-listed eSports company Mogul Games, which after a staggering 96 per cent fall in its share price rebranded itself as the lithium exploration and development company Lithium Universe.

“Hot sectors attract less than scrupulous companies who are more interested in a pump and dump and raising money to pay directors,” Jennings says. “There will be many pretenders. Only a few winners.”

The year’s standout exceptions – Liontown Resources (up 99 per cent) and Azure Minerals (up a staggering 1086 per cent on a discovery) – are now being kept aloft by takeover rumours, while Alkem remains up 24 per cent thanks to a merger with US chemicals conglomerate Livent.

Pilbara Minerals is up 28 per cent for no other reason than that I sold my holding last year (or maybe because it’s one of the few lithium producers, as opposed to “hopefuls”).

For those looking to dip their perhaps-burned toes back into the space, Jennings recommends sticking to existing producers rather than punting on speculative explorers. Not all lithium wannabes will get anywhere close to mining, and it takes years to do so. Pick quality management and projects that will attract funding in safe jurisdictions.

The advantage of technical investing – the system I now use – is that you don’t develop attachments to stocks and therefore aren’t at risk of falling in love.

When any stock I hold exceeds a 5 per cent loss, it is automatically sold from my portfolio – no love lost. Of course, it’s very possible that given I’m writing about it, lithium stocks will bounce and return to good value here (I’m a pretty good contrarian indicator), but the lesson remains: next time you feel yourself falling for a special someone, don’t let it get “complicated”.

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Jennings agrees that after such falls, now could be a good time for a rebound fling with lithium, just “don’t get sucked into the next big thing. Do lots of research and continually question whether the project stands up,” he says.

Gray says he will continue to hold his lithium stocks because “I know as soon as I sell for a loss, then positive news will come”. He is also looking to buy more Pilbara Minerals when sentiment starts to turn bullish.

Even if you “believe” (alarm bells sound) in a stock’s story, it’s the CEO’s duty to ride through the cycles, not yours, and you won’t be blamed for cutting a poorly performing stock loose in the same way you wouldn’t be blamed for ending a toxic relationship.

Remember, you invested to make money. If any of the fundamentals or technical data of the stock changes, your thesis for owning it should too. Most importantly, don’t fall in love with a stock that doesn’t love you back.

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• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.