“FINANCE DU JOUR: Drawdows >> Returns. If you buy X at 1 & it trades at 1000, then back to 1000, even if mentally. (b). Someone else bought at 1000, ask yourself: “would I buy it here if I didn’t have it?“. If the answer is Nyet, sell. So if it trades back at 2, you lost 998. Fallacy: there is no economic difference (outside of tax) between realized and unrealized. In finance, an opportunity loss (failed to sell at $1000) is never neutral.” – Nassim Taleb (20220811—BTC had fallen then due to Terra-UST) on sunk costs
There is no contradiction in reality
Related:
E.g.,
- You might like the price, but that doesn’t mean you can buy them because you have to think about the whole portfolio and its allocation