Strategic “Optionalities” is the secret of successful investors, entrepreneurs and organizations. Reactive cutting loss or investors who switch between strategies are the bane of those that strive (and fail) to get what they want. And most people do just that. They quit (cut losses) when it’s painful and stick when they can’t be bothered to when the fundamentals of the markets have changed.
There are two curves that define almost any type of situation facing you as you try to grow your portfolio. (A couple of minor curves cover the rest. Understanding the different types of situations that lead you to cut losses prematurely). Understanding the different types of situations that lead you to cut loss or quit- is the first step toward getting what you want.
Positive Black Swans and The Dip