I've observed and experienced this reserved attitude with regards to defending positions we know are sinking, whether it's an argument we're clearly losing online or an investment bleeding value in our portfolio.
The former is much more subjective to justify, since in arguments, ‘winning’ is rarely about facts but about who sounds more confident saying them.
The latter however is where I grapple with fallacies and bias to justify why I should keep an investment position, even when every signal tells me to let go.
"It'll come back," I hear a voice in my head speak. "It has to come back."
But then, why does it have to? Because I bought it? Believed in it and already lost so much that selling now would make it unacceptable?
The thing about falling investments is that some are very good at falling further. My mind goes to this popular saying that if a token drops 90%, it can drop another 90%.
I've not much understood the math behind such a statement until recently. So a coin that goes from $100 to $10 has dropped 90%. That same coin going from $10 to $1 is another 90% drop.
As long as I don't sell, I can tell myself it's just a paper loss. It's not real. It could still turn around.
This is sunk cost fallacy in its purest form and a characteristic here is being too busy trying to break even on a bet that was made six months ago with different information.
The Online Argument Spiral
With regards to losing arguments online, I've only observed this from a distance but now I see them replicated actively on social media, specifically on X.
I think intellectuals are some of the worst offenders of this phenomenon, perhaps because they've built entire identities around being right. Someone with "PhD" in their bio or "thought leader" of sorts in their description gets cornered in an argument and doubling down becomes almost performance art.
Our identity gets tangled up with our choices.
Although it doesn't sound like this in practice, it seems that when you take a public stance in an argument, you're not just making a claim but also telling everyone who you are, at least indirectly.
You're the type of person who believes this thing or values xyz principles and sees the world this or that way.
By extension, backing down then becomes an admission that you were wrong about who you are, or rather that you didn't know yourself as well as you claimed to.
Thinking it out loud, it's actually a silly way to live, as if people aren't allowed to change and growth means betraying some fixed version of yourself from three years ago.
Two Types of Pain
The pain of admitting we were wrong is sharp and immediate. It stings and embarrasses us for a moment or two.
However, the slow bleed of being wrong also comes with a pain that's diffuse. Chronic. We get used to it the way you get used to a dull ache. And because it's spread out over time, we keep telling ourselves it's not that bad.
But it is that bad. Sometimes worse, as when you finally do cut your losses and realize how much further you could have gotten if you'd just admitted the mistake earlier.
I think about my own portfolio sometimes and wonder how much of it is invested based on current analysis versus past ego. It's an uncomfortable question, which is probably why I don't ask it more often.
Perseverance vs. Stubbornness
Perseverance is a virtue when you're working toward something difficult but achievable. Stubbornness is a vice if one starts clinging onto something that's already failed.
The tip is knowing which one we're doing in any given situation. Then acting accordingly, pain is more so a subjective feeling than an objective reality in this context.
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I think one of the reasons I invest in things but don't constantly check it is because of the pain of it going down. Granted, I have only a few investments and they are doing pretty well, overall, but in a lot of ways I've lost many things in the past which was painful to see. It makes you tougher though, and one of the reasons I don't play in the shitcoin casino like others do. I don't have the time or patience for it lol
I think a consistent point of human behavior and existence over the past few thousand years is that the smart intellectual people are many times the biggest pains in the ass. They just stick their feet in the ground and refuse to adjust their positions. There are a good amount that don't do this, but far more that do and it's difficult to watch or listen lol
Right. I don't appreciate much of this easy accessibility to check on the performance of one's portfolio at any given moment when one decides to do so lol.
I think it exaggerates losses, makes you feel bad about yourself and come up with all this mental reasons why or why not you should take action xyz to remedy the situation when in certain cases, it's just fluctuations, investment will recover again or even break ATHs.
At the same time, this easy accessibility is why we have this options to invest in a lot of things including "feel good in the moment" type of investments, following trends without any proper research on our part.
Definitely a tough landscape to navigate with modern investments, I'm leaning more into picking a few investments for the long term, a couple more than few for the short to mid term.
Academic smart people are many layers out of touch with reality. Their understanding of "knowledge is power" is impractical, there's more to life than just having knowledge, having a good character is equally important if not more important than being a smart folk who knows about complex stuff.
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Lolsss, this is quite true.
Stubbornness and perseverance are alike. The difference is in the circumstance involved. That doggedness is indeed useful when one is on a right course but it turns to folly when one is investing in a wrong thing.
Right. There's always a very thin line between them depending on the circumstances. Besides, I think sometimes we know what the right thing is but out of fear we default to doing what feels good for the moment.
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You are welcome