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MSWG Weekly Newsletter 03 February 2023 (English)

Entry prices are irrelevant
To make a spectacular gain from a stock investment, one needs to get both the entry point and exit point right. While we do not have a crystal ball, every one of us enters a share purchase transaction with the hope of making a gain.

However, when the hope does not materialise, and the investment turns sour subsequently, be it due to a misjudgement or a black swan event, more often than not, the decision of whether to continue to hold on to or to exit the investment depends largely on the entry cost. Rationally, the entry price of a stock investment is irrelevant to an exit decision.