![]() One of the reasons why I started StW is to have a better quality comment section happily, members have delivered on that hope. The lower the quality of discussion, the more sunk costs seem to factor in once you get to anonymous internet trolls in public comment sections, they utterly dominate. ![]() Whatever the right conclusion (I offer mine below, but if I fairly lay out the premises, then this could be a useful exercise even if you reach a different one), it has absolutely nothing whatsoever to do with your cost basis, a factor that doesn't rank in the top ten things that matter and has almost nothing to do with what you should do next (I'd say "nothing" except for your tax considerations). This is the rare case (and first one I've written up on Seeking Alpha) where one can best express this via buying options. Instead of investing based on certainty, I try to invest based on probabilities, to understand the probability-weighted outcomes and then invest only when I can underpay. ![]() There is an entire insurance industry, but there is no "buying insurance" industry similarly, it is on average more lucrative to write policies than to buy them when it comes to stocks. My experience is that they are wrong more than right. If someone thinks that they know the future including 1) a specific stock price and 2) the date it will be achieved, I'm generally available to write options that they can buy. ![]() One way that I like trading against the certain is to generally be a writer instead of buyer of equity options. As events unfold, the certain voices are often the loudest - in politics, in business, and in investing - with those certain and wrong quieting down and those certain and at least temporarily right shouting the results. It is one of the things I most value in a counterparty, especially when it is applied to utterly unknowable outcomes. Scott Olson Certainty versus probabilities ![]()
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