⛏ Should I sell THIS stock?

Greetings Contrarian,

This is another Sunday edition, with your most pressing question. Here we go:

Dear Johnny-Been-Losing-Lately,

Ah yes, the old speculator’s dilemma.

Let’s be logical with our approach to portfolio building.

When we get too emotional and cheer for our stocks as we do our sports team, it rarely ends well. Hope is not a strategy.

In fact, every single trading day that you hold your stocks, you are voting with your money.

You are telling the market you’d rather hold your stocks above the other two options: holding other stocks and holding cash.

This is why it’s important to follow your stocks closely and check them against your thesis.

It’s hard work, but it pays off.

You see, humans are often victims of the sunk cost fallacy: the idea that, because we have already invested above what we’re comfortable with, we must hold something and never sell to avoid a loss.

Well, it pains me to say this, as a speculator who’s bound and fooled by the same psychological triggers you are, but you have already lost that money.

As Rick Rule would say: “it’s gone to money heaven”.

So the only question is, tomorrow, as the market opens, which stocks do you want to hold, independently of what you already own?

The easiest test is this: if you are willing to add to your losing position, you still have conviction. That’s a buy signal.

If you’re not, you are simply trying to avoid the pain of a loss that’s already happened. That’s a sell signal.

I for one think this may be a great entry point if you like their projects and management - the chart looks like the patient is dead and they should in theory diminish spending dramatically, therefore diluting less in the future.

The rest is up to you.

Happy speculating (responsibly),

The Editor

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational/entertainment and is not investment advice or solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.