When Does a Loss Become a Loss ?

LCapitaljr
2022-05-24

$Meta Platforms, Inc.(FB)$ $Amazon.com(AMZN)$ $JPMorgan Chase(JPM)$ $Netflix(NFLX)$ 

When you say, " I can't sell my stock because I don't want to take a loss." you assume that what you want has some bearing on the situation. But the stock doesn't know who you are, and it couldn't care less what you hope or want.

 Besides, selling doesn't give you the loss; you already have the loss. If you think you haven't incurred a loss until you sell the stock, you're kidding yourself. The larger the paper loss, the more real it will become. If you paid $40 per share for 100 shares, and it's now worth $28 per share, you have $2800 worth of stock that costs you $4000. You have a $1200 loss. Whether  you convert the stock to cash or hold it, it's still worth only $2800.  

 Even though you didn't sell, you took your loss when the stock dropped in price. You'd be better off selling and going back to a cash position where you can think for more " Objectively "


 - William O'Neil

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Comments

  • Sandyboy
    2022-05-25
    Sandyboy
    True that notional profit/ loss will eventually realised. But we hodl hopes of more profit or less losses. This ignores opportunity cost of sell and reinvest but also the reinvestment risk.
  • Ericlam
    2022-05-24
    Ericlam
    Yes,difficult to take the action.Need to hsve the courage to do it
  • SandDust
    2022-05-24
    SandDust
    Depends. If you plan for LT, loss is 5 years later. If ST then loss is days or hours
  • AE2
    2022-05-24
    AE2
    just collect and forget about it!
  • MaxWin
    2022-05-25
    MaxWin
    cool
  • Yishunfyuhvb
    2022-05-24
    Yishunfyuhvb
    S
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