Thanks for the insight @jcmleng.

While I’ve been canvassing the Strawman think-tank I’ve had one of the stocks hit my buy point and had the other hover close enough that I’ve adjusted the buy price to pick it up. Done and done.

For me @thetjs I ask myself;

Will I care on 10c difference in 30 years time when I am selling? (If I have time to pay attention now and adjust the limit order that keeps 'just' missing out)

Will I care in 10 years time when I bask in its CAGR of a bajillion % growth?

I know for some of my longer more successful holds (XRO for example), I don't even care that I paid $30.20 or $31 for a share now worth $150 (or what ever it is now). Also the % for CAGR or RoR or other calculations, the couple of cents don't matter.

Of course there are 'so whats' and 'it depends' about conviction and analysis etc... but I usually circle around to point 1 - Will I care in 10-30 years time if the thesis plays out... no, no I will not.

For better or worse, once I make my mind up to buy or sell, in partial or full, then I just get it done as my judgement of value is based on the SP at that point in time the decision to execute was made.

@thetjs like almost everything in investing, it depends. i will definitely have a SP target. as the share price moves towards this, i will revisit the investment case and try and determine why the SP is falling. if i can accurately determine why the SP is falling and i am comfortable with that, eg the market is wrongly focused or ST focused IMO then i think about the opportunities that the target company has actually opened up over time, if they are very rare and i understand the reason for the fall then i may move and get a parcel even if it is above the target. so its a case of a rare opportunity, in a company that rarely throws up opportunities, and where the stars align (or i think they do)

in practice where i have mechanically bought something i have often come to regret it, or it has taken a very long time to come good (with all that entails in increasing the chance of mistakes). the market may be inefficient but its not often is my base case belief

@thetjs - over recent months, when buying to establish a new position, I've been reminding myself of Ian Cassell's process - once he's SURE he wants a position in a new-to-him company, he works out his price, then is prepared to go up to 25% over to make sure he gets his holding.

Personally, 25% up is a little rich for me, but a few extra points if I am certain I want the stock? That, I will do.

When topping up, especially buying up (rather than adding when SP is down versus your initial buy price), I decide on a price based on the SP trajectory in recent days, and make the decision for a specific price I feel comfortable with (and there are so many inputs to what that comfortable price is that are specific to each company, it's impossible to define). But I rarely if ever pay above the historical trend line.

Great point @reddogaustin. It very much reframes the head space when you consider the finish line instead of the starting one.

I’ve definitely found this with the sell stage that once it’s done (mentally) it’s done. Sell and move through to the next opportunity.

Agree on the 25% being a bit rich @Clio but adopting that flexibility in purchase price is a great approach.

I agree with most of the comments in this thread; I personally actively avoid anchoring, or try very hard to avoid it anyway. The market doesn't care what I paid for my shares, and what they may have been worth when I bought them may be completely different to what they are worth now - because the business might be different now, or is operating in a different environment, more or less competition, better competition, industry disruption, structural headwinds, macro impacting the business in the short term and the business may not have the balance sheet to ride out temporary headwinds, etc., all sorts of issues.

In various jobs that I've had, when people knew I enjoyed investing and researching companies, they would ask me about companies they were interested in, and wanted my opinion. Sometimes these were intellectually stimulating conversations, others, not so much. They say there are no dumb questions, but there sure are a lot of very inexperienced people who should stick to index funds (ETFs) until they learn the basics. It was surprising how many people said something like, that company is $60/share so I can't afford to buy shares in that one, but this one is trading at 2 cents per share, so I can buy a lot more of this one. The premise must have been that all company shares are equal, some are just cheaper than others, so the lower the share price compared to other companies, the better value those shares were. No regard for relative market caps or shares on issue.

Another one that I got a lot was, this company was trading at $x last year and now they're half of that, so all I need to do is load up and wait for them to get back to last year's price levels and I've doubled my money, or suggestions/questions along those lines. No curiosity about why their share price had halved. ETFs for them!

I know this thread isn't about that sort of basic stuff, it's more about the psychology of either taking a loss at all or taking a loss that might be a smaller loss if you wait for a better exit price. Loss aversion in behavioral economics refers to a phenomenon where a real or potential loss is considered more severe than an equivalent gain. For instance, the pain of losing $5K on a bad trade is way worse than the joy or happiness we feel when we make $5K on a trade. The losses seem to leave scars and we relive the experience in our minds asking ourselves what we could have and should have done better. By contrast, we seem to take our winners in our stride.

More Reading on this: https://www.investopedia.com/terms/l/loss-psychology.asp

It did take a few years to learn the hard way, but I did learn that losses are unavoidable, and they come with the game of investing; you can do things to minimise them, and also to minimise their impact when they do happen, but you can't avoid them altogether unless you're very, very lucky, or you just don't trade.

So the trick is to minimise the damage which to me means getting out as soon as I realise I've made a mistake, or my investment thesis is shot. I will usually sell as soon as I realise that my investment thesis no longer stacks up - for any reason, could be my mistake, could be something out of left field that nobody could have predicted, doesn't matter, if the thesis is busted, it's busted. My worst losses have all been in companies that I held onto for far too long as they kept going south, and I was holding on due to thesis creep where I kept changing / adjusting my investment thesis to suit the delays and other issues that the company faced - like Oncosil Medical (OSL) who I haven't held for years but I should certainly have sold out of them well before I eventually did. I noticed they recently did a 400-for-1 share consolidation, so their current share price of $1.70 would have been $0.00425 pre-share-consolidation. Less than half of one cent.

Or Zoono Group (ZNO) which I started buying at over $1/share in 2020, as they had a surface treatment and hand sanitiser solution that killed Covid-19 without using alcohol. So much potential - so little delivered. I kept buying all the way down to 69 cents/share in May 2021, and then finally sold the lot at 28 cents/share in February 2022. ZNO closed today at 3.6 cps ($0.036/share) and they're still losing money and promising the world. In their Quarterly-Activities-and-Appendix-4C-Cash-Flow-Report.PDF for the June quarter their 12 month numbers (for FY25) included NZ$1.7m in sales, and NZ$2.4m in Administration and Corporate Costs. With all of the other expenses, their cashflow from operating activities was MINUS NZ$1.7m, so their expenses were double their revenue. They're still going backwards. And still doing capital raisings - most recently a rights issue to get even more money out of their long-suffering shareholders. Understandably there was a shortfall on their rights issue; it was not well embraced. But they had that RI underwritten so they still got the money. Zoono's management are making money, just not their shareholders.

This is why I don't give much credence to the promises of management in companies like Pointera (3DP) who do the same thing - keep promising BIG things, but deliver very little and can't become and stay consistently profitable, because I've seen it before. Doesn't matter how good the story is, there has to be traction in sales and a clear pathway to profitability that I can see progress being made on.

So my biggest mistakes were holding on to companies who looked rediculously cheap to me, and yet they just kept getting cheaper, because my investment thesis was full of holes, or else I was stretching the investment thesis to fit the company's situation as it got worse and worse ("thesis creep"). So instead of selling, I kept averaging down and ended up losing far more than I should have.

So, yeah, nah, I just sell now, as soon as I realise that company is no longer one of my very best ideas. And that can be for any reason, even because they have become overvalued. I bought a small ($10K) position in a company called Encounter Resources (ENR) last Thursday at 42 cents/share after watching Emanuel Datt on an MoM podcast discuss their copper potential being more interesting to him than their niobium prospects despite them being a "Nearology Play" on the massive success of WA1 Resources (WA1) who have probably discovered the best niobium deposit in the world there in the Arunta region of WA. Manny made it clear that he believed that what ENR had in terms of their own niobium resource was far inferior to WA1. WA1 has run far too hard for me to get on board up here, so my thoughts were that I wanted copper explorer exposure (not much, just a bit) and that ENR might also run on high grade niobium hits and give me an early profit - or I could hold them for longer for their copper project drilling results. Well, wouldn't you know it, they release an announcement yesterday titled "Outstanding High-Grade Niobium Intersections Expand Green" and by lunch time they were up +29% @ 60 cents, having been as high as 62 cents, and I sold the lot at 59 cents immediately, so I booked a 40% profit in 2 trading days. They closed yesterday at my sell price of 59 cents and then today they dropped -7.63% to close at 54.5 cps (after trading in a range between 51 and 59 cents today).

My thoughts yesterday were that more than half of market participants were not even active yesterday because of the public holiday in NSW, ACT, SA and QLD, and that sanity would return today and the market would realise that ENR were NOT worth +40% more because of those few high grade niobium hits they reported yesterday. I expect they'll continue to drift back down as the week progresses. I have a buy order in at lower levels to buy them back. I still like them for their copper potential, but WA1 is the niobium play, and WA1's deposit is so huge they don't need to buy ENR or TR2 (Tali Resources) to consolidate that area and get more niobium, so I'm not looking at ENR as an M&A play as some punters seem to be doing.

So I give that example to say that making a decision to sell and doing it immediately can help you in different ways, like enabling you to lock in profits on a company whose share price has run too hard and too fast, or a company whose share price is likely to keep going south.

And there's also opportunity cost - meaning the cost of having your money in a mediocre or poorly performing company instead of having it in a superior company that is performing better for you. Compounding doesn't work if the value is going backwards or staying the same.

So no, I am not "wed" (or "anchored") to my buy prices. What I paid for the shares has nothing to do with whether or not they are one of the best companies for me to hold today compared to other choices I have. And I like to keep most of my investable capital in my best ideas most of the time. And that means being prepared to exit companies to rotate that capital into other companies that I consider to have better upside potential. And once I've made that decision, the sooner, the better.

The thesis break = immediate sell is one process I now regularly use thanks to the insights from this group.

Its helped cut through, what was previously, days / weeks of deliberation that generally speaking only resulted in more capital erosion. Both a capital and mental saver.