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Originally Posted by blkgsr
i was thinking about it but thought, how much more do i want to dump into this thing....
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I normally don't give investment advice online but why subject yourself to such stress... there are safer ways to make money in the market, albeit not at the speed that wsb wants. AMC at this current price is still sitting at 300% year-to-date return. Is there any development in the actual business that warrants the company to be valued 3x what is was prior to this year? We all know movie theater industry was on a secular decline long before covid. Even the most bullish street analyst is pegging AMC at a price target of $5-6 per share after baking in a strong post-covid recovery. But then again, anything can happen in the market and I know its painful to cut your losses. We call this cognitive bias Loss-aversion.
The loss-aversion tendency breaks one of the cardinal rules of economics; the measurement of opportunity cost. To be a successful investor over time you must be able to properly measure opportunity cost and not be anchored to past investment decisions due to the inbuilt human tendency to avoid losses. Investors who become anchored due to loss aversion will pass on mouth-watering investment opportunities to retain an existing loss-making investment in the hope of recouping their losses.