I would some point cut my losses, but to be honest I will also buy and hold a company that literally does nothing for a long time. That can mean zero return, or nearly zero and no dividends. That's a negative return once you factor in opportunity costs and inflation. I can do that because I have a very specific reason I buy these companies to begin with, and I don't have the same 'occupational risk' that a fund manager might have where he has to beat the market every year, or finish in the first quartile for bonuses or whatever.
You are totally right though, because I don't continually pour money into a position. But if you're buying shares at $10 and suddenly they're $8 when nothing has changed in your thesis, then you can't be upset and stop buying.
|