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To Sell Or Not To Sell?

Recently I had an issue with my laptop.


I decided to fade out the company's name as I may be the "lucky" person who had gotten that 1 faulty laptop in 10,000 sets.


When the service staff came down to replace the motherboard, he told me he remembered seeing me 😅


I asked him that given my laptop had many issues and it's my first year, I could request a new replacement laptop.


To my dismay, I concluded from him that I needed to "accidentally" break it since I have an accidental damage warranty of up to 3 years.



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Here comes the question, if you were in my position, would you sell the laptop after the repair?


Decision, Decision, Decision

Given the specifications and the purchase price with the 3-year accidental warranty, most who are well versed in this field would agree that the laptop was a steal.


As for the service support staff, as much as I want to rip their heads off for the product's malfunctions, I can't bear to do it because I am aware they are just doing their job and they are following the company's protocol.


Not forgetting the warranty came with onsite support to repair the laptop.


Two of my friends commented that I was too nice.


However, when productivity is at stake, being nice doesn't quite solve the future potential problem of the laptop going dead on me.


Hence, I decided to sell the laptop and get a new one.


Hope of Recovery

I realized that mentality is very similar to investment.


There are definitely some stocks in the portfolio we know are "dead". We probably like the management (or used to like the management).


Or probably they used to give us handsome profits but are no longer doing so currently. Or potentially may not have the ability to do so in the future.


The business now is barely staying afloat and the stock price just keeps plummeting.


When we login to the platform or review our portfolio, most investors can't bear to cut the loss. If they sell at a loss, they would definitely lose money.


Yet, if they continue holding, they may one day see the rise of the once "glorified" company rise from the ashes.


New Light

It may be true in some cases.


However, more often than not, the rotten egg tends to stay rotten.


One technique that I had learned from another very successful investor is,


If you had the chance to wipe your portfolio and start out again, would you have invested in that company?

If the answer is yes, then continue to hold on to it.


If the answer is no, the next course of action is pretty obvious.


This idea came from one of the management in a US company that was in a doldrum.


The manager suddenly thought of an idea, what happens if they had fired themselves and re-hire themselves, what would they have changed?


A myriad of ideas flooded them.


Because of this simple question, the manager broke free from the shackles holding him back and made some bold decisions to restructure the company.


And of course, this (true) story ended with a happy ending of the company making profits in that particular year.


Sometimes, we are blindsided by the ideas and notions of certain investments in our portfolio.


It can be a stock that is already bleeding so badly, a fund where we have lost more than 50% or a property that has issues finding tenants that can meet the market rental rate.


Yet, if we continue to hold on to them, the weight of such investments could cost us much more.


Break Free

Once you can overcome the pain of your loss, the faster you can actually recover the losses.


Because praying for recovery in investments may not always be the best solution sometimes.


Perhaps a more pro-active approach of removing the bad apples would be more productive in the long run.


Take on a fresh perspective, restart your portfolio and ask yourself if you would continue holding your existing investments.


If you are unsatisfied with any of the investments, then do consider using the change from the lousy investment and channel it into another acorn which has the potential to become the next tallest oak tree in your farmland.


That, my fellow investor, is more promising and safer. In the long run.


Disclaimer: I usually have a holding period of at least 3 years. Unless they had hit the mark, I wouldn't sell the investments and continue to monitor them. If they had changed fundamentally (for the worse), only then I would immediately execute the sell.


PS: It would be so helpful if someone could help me out with the name of the manager and the company. I tried googling but can't seem to find it. Thank you in advance!

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