51 - Psychology of Selling Losers

Mental Models discussed in this podcast: Opportunity cost Loss Aversion Diversification vs Concentration Price Anchoring Zero-Based Budgeting Commitment Bias Game Theory:  Minimax Theorem Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience.  Follow me on Twitter and YouTube Twitter Handle: @TreyHenninger YouTube Channel: DIY Investing Support the Podcast on Patreon This is a podcast supported by listeners like you. If you'd like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at DIYInvesting.org/Patron. You can find out more information by listening to episode 11 of this podcast. Show Outline The full show notes for this episode are available at https://www.diyinvesting.org/Episode51 My portfolio Current/Future State Owned 11 stocks  5 winners 5 losers 1 borderline loser The goal is to reduce to 5 positions Sold 4 stocks so far (made money on 2, lost money on 2) Not all "losers" lost money. Some made money. It's all about future return potential from here Summary: It's all about opportunity cost. Use rational analysis to overcome your behavioral biases.