If you’re an investor, you have probably heard the phrase, "You don’t watch to catch a falling knife!" This phrase basically means that you want to avoid investing in a stock that is plummeting. You never know when an equity in free-fall will reverse, and you can certainly get cut, seriously hurt, or even destroyed by catching a falling knife that keeps falling. Today’s post applies this very same concept to choosing your employer. You never want to work at a company that consistently underperforms (a falling knife), as this will certainly damage your career.

Now, as an aside, I don’t fully subscribe to this rule 100% in the world of investing. I’m a value investor, one that optimizes towards cash flow. When a stock I like is plummeting, I average down (lower prices mean higher yields as long as the yield is sustainable). I keep buying in small increments and ride the wave down. By avoiding a big lump sum investment, I spread my risk of catching that falling knife, a concept known as dollar cost averaging. Unfortunately, this side note will never work with your career because you are either all in or all out for the purposes of this article. You either work somewhere or you don’t, you can’t average down as in investing.

In Silicon Valley, your experience is everything. When you work at great companies, ones that are constantly growing, doors unlock. Everyone wants their business to grow and flourish. When building a world-class team, such companies hire employees who have experienced rapid growth before, employees who know what it’s like to work in a growth environment. Growth often comes down to the people and their way of operating. If you’ve been through rapid growth over and over, you have the right habits that all the top companies want!

Moreover, employers want top talent, a team of "A Players", so to speak. Just as a big name school (such as Stanford) improves your chances of landing a great job, having that big name success story on your resume improves your chances as well. Great schools and employers are not only about what you learn, they also represent one’s character, work ethic, and overall capabilities since it’s so difficult to get into those top schools and companies. They pre-screen you as a rock star candidate.

When you work at bad companies, ones that are shrinking or consistently facing challenge, doors close. Your experience is a reflection of you. Employers wonder why you stuck around so long at that dud of an employer. Could you not do any better? Did you not have the foresight to see what’s ahead? Did you personally contribute to the poor performance?

Now, don’t get me wrong. I commend those who take risk, those who enter a difficult situation and turn it around. Those turnaround artists are highly sought after in Silicon Valley. The key here, however, is to understand when to cut your losses. Not all turnarounds work out. You need to know when it’s time to throw in the towel, and move on.

Also, I like those who have a true breadth of experience, both good and bad. Bad experiences build character as a business leader. It’s ok to have one or two poor-performing companies on your resume, as long as the others are rock stars and as long as your tenure at those companies carries a story. Again, know when to cut your losses and have the foresight to choose wisely. Your experience is a reflection of you.

As an investor at heart, I like to choose employers wisely. When choosing your employer, you are making two investments. First and foremost, you are investing in yourself and your future, the topic of this post. Second, you are investing in the classical sense (for employers that provide stock options or other forms of ownership). In my opinion, you always want to gravitate towards high-growth companies, and cut your losses when you find yourself catching a falling knife.

Disclaimer: I am not a licensed investment advisor and this post is not investment advice. This post is for entertainment purposes only.