This evening, SanDisk, Micron, and SK hynix memory stocks strengthened before the market opened. The people who find it hardest to bear it are actually those still holding short positions. Some people continue to hold on, and the reason sounds very familiar: after a stock has risen this much, it should surely pull back.
Of course, the shorts might be right, and the price won’t rise forever. But if the rationale gradually shifts from “valuation and trend don’t support it” to “I can’t admit defeat here,” then the trade stops being about the company and becomes about your own pride.
I’ve done something like this before. The price kept going higher day after day. What I wasn’t looking for was new information, but instead more bearish news that would help me feel reassured.
When deciding whether to keep a losing position, I only ask myself: if I didn’t have this position in my hand today, would I open a short at this level again?
If the answer is no, then in many cases, there’s no need to wait for the market to answer for you.
#MemoryChips #InvestmentReview
Of course, the shorts might be right, and the price won’t rise forever. But if the rationale gradually shifts from “valuation and trend don’t support it” to “I can’t admit defeat here,” then the trade stops being about the company and becomes about your own pride.
I’ve done something like this before. The price kept going higher day after day. What I wasn’t looking for was new information, but instead more bearish news that would help me feel reassured.
When deciding whether to keep a losing position, I only ask myself: if I didn’t have this position in my hand today, would I open a short at this level again?
If the answer is no, then in many cases, there’s no need to wait for the market to answer for you.
#MemoryChips #InvestmentReview