MICHEL PIREU: Back off, ego, this bad stock is getting the boot
Accepting you have a poor investment is the first step to cutting your losses and moving on
“There is a complicating factor that makes the handling of investment mistakes more difficult,” says Philip Fisher in The Investor’s Anthology. “This is the ego in each of us. None of us likes to admit to himself that he has been wrong. If we have made a mistake in buying a stock but can sell the stock at a small profit, we have somehow lost any sense of having been foolish.
“On the other hand, if we sell at a small loss we are quite unhappy about the whole matter. This reaction, while completely natural and normal, is probably one of the most dangerous in which we can indulge ourselves in the entire investment process.