@RafesUserName What I see here are two (or more) conflicting ideas about when selling is appropriate. Put succinctly, is it price anchoring or opportunity cost?
My investing journey is short–just three years long. And the first advice drilled into me came from TMF–buy a good company regardless of price and hold it forever. Valuation doesn’t matter. I did just that. Sadly for me, I followed that advice in early 2021.
When I found Saul’s board, I heard a new twist–even before things got really ugly in the market. It’s right there in the Knowledge Base: “Opportunity cost.” Sure, the great company I bought may one day get back to the price I paid for it. And if my thesis isn’t broken, why not just wait it out?
The answer I found here? Get out because whatever the value still is in that way underwater company could sit there for a year or more earning nothing, while moving it to something that is growing could earn that money back much more quickly. Saul reiterated that earlier today.
The thing I faced in late 2021 and in most of 2022 was that the dilemma applied to every single company I owned because I had bought at such high prices. I left them there for quite some time as companies across the board dropped like stones and there seemed to be only opportunities to lose rather than to gain value, no matter where I put the money.
In 2023, I began finding my stride and trying to sort out those conflicting positions and how to build my own confidence in a company. At times here it began to feel like people were trading every quarter, which made me to prone to panic selling at earnings time. But I could also see the real opportunity cost argument.
With AEHR last night, the opportunity cost won out. It is a great company. My thesis was not broken. But I’ve followed them closely and think it will be not a quarter or two, but a year or two, before that S-curve really starts to ramp, at least on the EV side.
I will mostly likely take a small position once the wash sale rule times out to make sure I don’t miss a sudden jump in their other offerings. After all, AI went “boom” overnight, just as EVs showed their boom had been greatly exaggerated, at least in its timing, almost as quickly.
Maybe I’m totally wrong. I have not yet experienced a “normal” market and thus the things I am learning may be totally skewed. But I had an almost 8% position that was down over 50% and opted to take what I could get of that for other purposes.
JR