SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : All About Sun Microsystems
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Charles Tutt who wrote (6310)12/19/1997 5:42:00 PM
From: Alok Sinha  Read Replies (1) of 64865
 
Charles,
Even though in the real world of taxes, the cost basis is relevant, I can't understand why people pay so much attention to it. To me the only relevant measure is the market value of my investments. Any changes with respect to market value is an opportunity cost that should be factored in future investment decisions. Unfortunately, most investors are obsessed with their cost basis, and partially ignore fluctations in market value as long as they are ahead. On the other hand they hate to sell when a stock falls below their cost basis because they do not want to take a loss. This results in frequent uneconomic decisions and tremendous opportunity costs . I admit, I myself find myself allowing the cost basis to factor in my trading strategy, but try very hard not too.

In that sense I have found the following advice to be very useful in deciding when to sell.

"If you don't think you would want to buy a stock at this price based on value, then sell it" - and buy something that you would want to buy with the money.

(Even with a margin call, I would rather borrow money than sell if I believe that the stock represents good value). Although I was fully margined during the Oct crash to add SUNW, I did buy another 1000 at 35 and 7/8 last week (along with 20 Jan 40 calls, which I sold today)


Regards

Alok
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News