Bad apples and why you should throw them right away!

Loss Aversion
Photo by Peter Feghali on Unsplash

I hate to lose. I hate it even more to lose my money. I started to invest in stocks soon after I started to earn. I was naïve enough to ignore sane advice. I didn’t do my research and picked stocks when they were ripe at a pretty insane price and eventually, it became sour. I am a bit of a hygiene freak. I don’t even consume apples that have been cut like 10 minutes ago. I throw them away or give it to others. I should have done this to my sour stocks as well. But I didn’t. Instead, I held them too long, hoping to sell it at least at the price I had bought them. I sold good stocks, made a profit and felt happy. I held dear my bad apples. My portfolio was full of bad apples and in red. I sold them off sadly at throwaway prices. But there are still a few bad ones which I cannot even sell. I learnt my lesson, “Throw away bad apples (stocks) when I see one and cut down on my loss”.

Oh, by the way, holding on to the losers hoping to sell them at a profit later, is wishful thinking. Most of the times it never happens. There is a term for that. Loss Aversion. Yeah! And it turns out I am not alone. People are loss averse, meaning people hate to lose.

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