Cream butter in a large mixing bowl; gradually add sugar, beating well. Beat in eggs. Sift together flour, salt, and nutmeg three times; gradually add to creamed mixture, stirring well. Stir in sherry. Chill overnight.
Divide dough into fourths. Work with one portion of dough at a time, keeping remaining dough chilled until ready to use.
Roll one portion of dough to 1/8- inch thickness on a lightly floured surface. Cut with assorted shaped cutters; place 1 inch apart on lightly greased cookie sheets. Bake at 350° for 7 minutes. Remove from cookie sheets, and cool on wire racks. Repeat with remaining dough.