Some people buy a frog hoping it will turn into a princess. I buy a princess knowing it will turn into a frog.
This is a theme inherent in investing but I think it applies to other life situation. A person buys a bad stock, something that's dropping massively, the aim is that they catch it at the bottom and see it revert and skyrocket. What ends up happening is they catch a falling knife and it rips them. The story of the princess and the frog. You want dust to turn to gold. Ironically, DUST is a Direxxion bear for miners. It's a ticker related to gold...ha ha.
The thing is to buy a good stock knowing that eventually, it will pay off with good dividends, appreciation etc. I can give multiple examples in both cases. But still, people patronize these stocks. Stocks you know are going to be delisted, reverse split after reverse split. I've personally seen the reverse splits as a good chance to short. It's a frog, it'll stay a frog...unless that magic happens when it turns into a princess and how often does that happen? Exactly.
I'm quick to cut my losses. Doing that was helped me to hit 12%+ of that portfolio earlier this year. Does that mean you need to cut your losses quickly all the time? it depends. Are you buying SPY at 180? What do you do at 160? This is a very situation and I'm not giving investment advise here so this should not be considered as one. There are many factors and there's a difference between trading and investing.
I just noticed the same situation applies to real life. Taking a bad situation and hoping to make the best of it. In my investsments, I'd cut it short if i wasn't getting a return. A lot of times, we put up with hell, hoping it would turn into earth or perhaps heaven. We suffer and suffer and yet we continue to hope and hope? Again how long do we put up with hell till we decide enough is enough when we have the power leave?
I've seen people endure abusive marriages, relationships, other hellish situations and yet, they hope. OR are they in denial? Are they failing to see the situation for what it is. Does acknowledging it a a bad situation but hoping things would change also a form of denial? Denial of the fact that certain things might not change? You CAN teach an old dog new tricks If it's willing to learn. That's something I've learned this year.
The problem is that we finally discover our hope has actually been denial disguised as hope? We are still unable to break free? Why? I think psychology plays a part here. The fear
- That perhaps we are giving up too early,
- Of guilt, that we are not doing enough to effect change (guilt is a very great instrument the enemy uses)
- That this may be our portion (pure nonsense. Another lie the enemy tells. I've come to realize God does not put his children through hell here on earth.) If it is your portion, pray and ask God to change it. He can... Jabez did, Heziakiah prayed and effected change.
- Maybe it's me...maybe I'm the problem. Need a I say more...Another lie. The enemy likes a confused mind for several reasons. One being that they can't think and make decisions.
- One more day, week, month, year. Telling ourselves to hold on a little longer, maybe the situation needs more time to change. Or perhaps others have told you this silly lie, oh, just bear a little longer and you'll get there. I like my two bears -bear and forbear- but wise judgement is needed in this case.
- Fear that things might turn just when we give up. You want to be there when the change happens. You want others to say oh, such and such helped the change. Or it's a stock you bought at $10, seeing it sit at $2 for a year and finally, fda news comes out and you're bragging now when it's at $20 because you held on and didn't give up. Same applies in life. The question I ask here is motive? Is the motive really holding on and hoping you can recoup your investment or where you waiting for bragging rights? The ability to boast and say "hey, it paid off finally"? I'm not necessarily condemning but what is your opportunity cost? Could you have invested in something else by cutting your losses early and moving on to other things? And here's another alternative for you: Maybe, you're not the one to effect the change. I have a song by Greg Long that says if it takes 15 times to hear about Jesus, for someone to be believe.... you could be the first, the fifth, there may be years in between but what if you're not fifteen?
Well we don't know do we? Ours is to make the right decsion. What if its not the right decision? Examine things carefully....This is another blog on it's own - decisions.
So is there a much of a difference between hope and denial or do our hopes somettimes turn into denial? Or has it been denial all along?