Why you always keep loss making product?
Once in a while you listen to some concept and feel that you should have known this 10 years back.
I was talking to my cousin brother and he told me something so cool that light bulb went on in my mind.
Invested in two stocks/shares. company x and company y.
Month later company x stock goes up 20% and company y stock goes down 30% .
Now there is urgent need of money and you decide to sell one company.
Which one would you sell?
Be honest – take 10 seconds to think – ask yourself what would you do?
If you decide to sell company x which has gone up and made profit, you are just like anyone else. Human nature will direct you to sell company which made profit and hold on to company whihc is presently in loss.
Just because you made 30% loss on company Y, you want to hold it and not sell it. You are expecting that price will go up and you will atleast reach break-even.
Chances are company Y keeps going down and your loss keeps getting bigger. Company X which you sold for 20% profit keeps goign up after you sold it.
This is natural way people think & work. And most of these people end up with all loosers in their basket.
Smarter way is to keep winner and let go looser – if you have to.
After listening to this common human behavior – I started thinking hard – if I ever made any decision in Diamond market when I was suppose to pick one thing from two options – a winner & looser.
Have you ever faced such situation while trading diamonds ? Have you faced such situation while making business partners ? Choosing Seller or buyer?
Drop a comment if you faced any such situation in Diamond market.