To continue the above. "THE WHEEL TURNS". I like this concept as a description of life and ivnesting. "The wheel turns" is a common phrase that denotes the cyclical nature of life and the inevitability of change. It implies that, irrespective of how favorable or unfavorable things are at present, they will eventually undergo a transformation and follow a pattern of repetition. This phrase serves as a reminder that nothing remains permanent, and it's crucial to welcome change and be flexible. Its origin can be traced back to several cultures and belief systems, such as Buddhism, Hinduism, and Norse mythology." A good concept to consider, accept, and acknowledge........as a living person and as an investor.
Another little lesson for investors is contained in this historic and ancient writing: “The Moving Finger writes; and, having writ, Moves on: nor all thy Piety nor Wit Shall lure it back to cancel half a Line, Nor all thy Tears wash out a Word of it.” The explanation below is "stolen" from Reddit. "The words in the green box are from a series of medieval Persian verses, loosely translated into English by Edward Fitzgerald and published as the Rubaiyat of Omar Khayyam. All the verses together (there are about a hundred) are on the theme of life's essentially arbitrary nature, and can be summed up as "Don't try to understand anything, just enjoy yourself". This particular verse is an extended metaphor for how the past is completely outside of our control, so forget about it, and enjoy the present. "The moving finger writes and having writ moves on" The past here is compared to a story. "Time" writes a record of past events, and then just moves on to what's next "Nor all your piety nor wit shall lure it back to cancel half a line" No matter how good or clever you are, you're still incapable of changing the past ("canceling half a line"). "Nor all your tears wash out a word of it" And being sad about it won't change anything either." https://www.reddit.com/r/ENGLISH/comments/ogsb81/can_someone_explain_me_the_meaning_of_those_lines/ MY COMMENT Some great advice for modern investors from ancient Persia.
Oddly enough, I was just thinking the other day. The SP 500 has not had a correction event at all in 2024….at least to this point. I hesitate to even post that at this point, but it really is an example of how easy we have had it this year.
Yolo'd a small position on some NKE shares today for all accounts, impressed by Elliot Hill the new CEO. After all everyone needs a pair of sneakers.
I also like Elliot Hill....a lot. Just the sort of background you want for a CEO at NKE. A .....lifer there. BUT....the path forward is going to take a while....I suspect at least six months perhaps 12 months.
I had a good gain today. AND....I beat the SP500 by 0.91% as an added bonus. Even my 106 shares of PLTR that I bought at the open today ended their first day in the green......sell, sell, sell. Up by 0.06% for one day.
I like this little article. How the sunk cost fallacy hurts your finances If an investment isn't working out, it's OK to cut your losses and pivot https://www.salon.com/2024/12/15/how-the-sunk-cost-fallacy-hurts-your-finances/ (BOLD is my opinion OR what I consider important content) "Everyone makes mistakes or suffers from bad luck from time to time. But too often, people dig their heels when the tide is shifting against them, rather than getting back on course — especially when they feel they've invested too much time, money or effort to make a change. This phenomenon is known as the sunk cost fallacy, and if you're not careful, it can keep you from reaching your financial goals. In economics, a sunk cost is an expense that has already been spent, and there's no way to recoup the costs. For example, if you start watching a TV show and don't like it, you can't get that time back. It's a sunk cost. A sunk cost fallacy then occurs if you lean into the sunk cost by putting more resources toward it, even though that doesn't recoup what's already lost. So if you keep watching that TV show and pay for another month of streaming because you've "invested too much time," spending more time and money does nothing to get your original time and money back. Instead, it often leads to more losses, as you could end up watching more of a show you don't enjoy, rather than switching to something you'd like. This issue can also pop up in more serious ways financially, such as leaning into sunk costs with investments, large expenses or career choices. Sticking with misguided investments A major way that the sunk cost fallacy hurts finances is by causing investors to stay committed to a misguided investment for too long or even allocate more to chase losses. Suppose you bought $1,000 worth of a particular stock on a hunch that the company would have a strong earnings report. However, the company ends up having a disastrous quarter and the stock falls by 20%. Now your investment is worth $800. The psychology of this sunk cost fallacy is that people feel they will lose money by giving up now, even though logically they will get something back by selling, rather than risk further losses, explains Tania P. Brown, a CFP and job exit financial coach. This issue gets tricky, because you do want to be cognizant of panic selling, and investments do fluctuate in value. However, you need to reevaluate based on the new circumstances, not what once was. The question is whether keeping that current value of $800 in that stock aligns with your risk tolerance and goals more than moving those funds to another investment. "I always try to remind my clients that not all investments need to succeed. The overall plan needs to succeed," said Cliff Ambrose, founder and wealth Manager at Apex Wealth. If you don't have an overall plan to guide you, then you may need to start there, rather than trying to pick or stick with investments that aren't necessarily getting you to where you want to go. As you plan, you can proactively consider how you would respond if faced with particular losses, like having a strategy for what you would do if a particular investment dips by 10%, said Brown. For some, the answer might be to stay the course but perhaps have a strategy like a check-in with a friend or adviser at that point. Others might set a limit at which point they will exit the investment. That way, you don't have to make a purely emotional decision when faced suddenly with losses. Getting attached to purchases The sunk cost fallacy can also emerge when it comes to hanging onto purchases for longer than they best serve you. Let's say you took out a car loan for $40,000, with monthly payments of $600, and you've already paid off $20,000 for that car loan. Then you get a new job that enables you to work from home, so you realize that you don't really need that car anymore, as you can share your partner's car. Suppose the car's resale value enables you to break even in terms of paying off your remaining loan and getting rid of the car. But you're hesitant to take the plunge because you feel like you've already paid off half the car, and you don't want to feel like you spent $20,000 with nothing to show for it. However, this is a sunk cost. Continuing to pay $600 per month — plus maintenance, registration fees, etc. — only digs a deeper hole. It might not feel great emotionally, but the reality is that the best decision for your finances could be to sell the car. What you spent in the past shouldn't influence your decision now. That money is gone In other words, what you spent in the past shouldn't influence your decision now. That money is gone. You can only choose what to do going forward, and you have to weigh the pros and cons of your options without letting the emotion of what you've already spent get the best of you. "Human beings naturally are impulsive and they make a lot of decisions off of emotions rather than logic. So at the end of the day, our job [as advisers] is to bring logic and actual math into the conversation and try to see if we can outweigh what emotional decisions were previously made or can be made in the future," said Ambrose. Staying at the wrong job Not all sunk costs have to do with direct spending. Sometimes the sunk cost fallacy shows up in more complex ways that affect your long-term finances and life satisfaction, like with your career choices. Someone who spends several years and hundreds of thousands of dollars on higher education to be a doctor or lawyer might feel like they can't simply walk away from all that investment. Yet there's no getting that time or money back. It's in the past. Now that person would have to evaluate if moving forward with their current career path is the best decision for their future or if they're better off changing course. Financially, this decision can be dicey, especially when it comes to high-paying roles like doctors and lawyers. Yet there are plenty of cases where someone leaves these types of positions to pursue their passions, like starting their own business, which leads to higher income in the long run alongside greater life satisfaction. "Sometimes it's about re-imagining, thinking about this change as an evolution, not necessarily that you're giving up something" "Sometimes it's about re-imagining, thinking about this change as an evolution, not necessarily that you're giving up something," said Brown. If you're considering leaving your current employer to start your own business, for example, the years spent climbing the corporate ladder are not necessarily wasted. "You're transitioning from using your skills for an employer to using your skills for yourself," said Brown. Ultimately, reframing the issue and zooming out can help counter the emotionally charged nature of these types of decisions that often lead to sunk cost fallacies. With investing, for example, "If the big goal was to build wealth, we can reframe it as we're exchanging investments; we're cutting our losses to move to another place to build wealth," said Brown. Also, being gentler on yourself can help you accept errors and move on in a way that better aligns with your goals. "If you're doing something you've never done, it's okay to fail. You will make mistakes," said Brown. "It's OK to stop something that is not working."" MY COMMENT YEP.....it is all about the portfolio as a WHOLE.....not a single stock or investment. There is nothing wrong with quickly cutting losses on a bad investment. Personally I dont consider it cutting losses, anyway. I consider it a.....lateral move. As long as that money is going into a similar category investment....another stock or fund.....I dont think of it as a loss. One thing I NEVER do....plow more money into a failing position to try to average down my cost. That is just about always a psychological trick your brain is playing on you and a losing strategy.
