Cutting losses is worth a thousand gold pieces. --But I do not cut my losses.

Introduction

"Cutting losses is worth a thousand gold pieces"

The decision to cut losses is worth a thousand gold pieces—that is a stock market proverb.

I think it is a fine saying.
But please let me be honest.

I have never cut my losses.

Not once in 20 years.
Today, I will tell you the reason why.

Reason 1: I do not buy companies that I would need to cut losses on

This is the biggest reason.

Because I do not buy companies that I would need to cut losses on in the first place.

I choose them at the entrance.
Therefore, the situation of worrying about whether to cut losses never even arises.

So that I do not have to use the 'thousand gold pieces' of cutting losses,I spend a thousand gold pieces before I buy—that is the feeling, perhaps.

What does an unrealized loss mean?

That said, there are unrealized losses in my portfolio too.
Naturally.

But when I look at the contents—usually, it is

a sector that just happens to be unfavorable in the current economic cycle.

It is not that the company is broken.
It is just thatthe season is not right.

It is the same as straw hats not selling in winter.

When the tide changes, the valuation will change too

And the economic cycle—will definitely change.

When the tide turns, the valuation changes too.
The sectors that are cold right now will see the sun shine on them again.

In other words, the current unrealized loss is not a "failure" for me, but—waiting in line.

And what's more, there's no need to search.

This is the most interesting part.

That "sector that is cheap right now" is—already inside my own portfolio.

I don't have to go out of my way to look for new stocks.
I don't need screening either.

Unrealized losses are markers that tell me "what to buy more of next".

—that's why I don't get too rattled when I see red numbers.
It's just a "Oh, I guess it's about time" kind of feeling.

Take a loss to gain a profit.

⚠️ However, this one thing is different.

To avoid any misunderstanding, I will say this clearly.

Even if I say I "don't cut my losses," if the substance of the company itself has changed, that's a different story.

• If dividend cuts continue

• If the business is structurally collapsing

—this is not a "cycle," but a "different problem."
I look at this calmly.

Is it cheap because of the season, or has the company broken down?
—this discernment is necessary.

Cutting losses is a trader's mindset.

Lastly, one thing.

Cutting losses is, for a trader, an essential technique.
I have no intention of denying that at all.

If you are going for short-term price gains, you cannot survive if you cannot cut your losses.

But—I am not a trader.

I am a long-term investor who owns companies and continues to receive dividend increases.

The game I am playing is different.There is no need to apply someone else's rules to yourself.

Conclusion

Knowing when to quit is worth a thousand gold pieces.
—It is a fine proverb.

But that is a trader's thousand gold pieces.

I will not quit.
Because I only choose companies that I do not need to quit on.
And because an unrealized loss is a sign of the next opportunity.

Is your unrealized loss—a "failure"?
Or is it "waiting for its turn"?😊

This article is intended to provide information based on personal views and does not recommend investment in specific stocks or financial products.

Please make investment decisions at your own discretion and responsibility.

Thank you for reading until the end🙏
If you could click the "Like" button, it would encourage me to write the next article🙏

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