r/valueinvesting
About loss aversion on value investing
Author reflects on selling winning stocks (NVDA, TSLA, RGTI, INTC) too early due to loss aversion, despite solid fundamental analysis.
- Successfully applied robust fundamental frameworks (CAGR, PESTEL, TAM) to identify high-growth opportunities.
- Accurately predicted the emergence and potential of AI, EV, and semiconductor sectors.
- Severe loss aversion and poor exit timing led to missing out on exponential subsequent gains.
- Psychological biases undermined the effectiveness of long-term fundamental analysis strategies.
Hi, i do mind to share my financial story about loss aversion and missed opportunity over years. It is interesting story, i hope you find amused.
First, i do engineering over years, i am lucky to see how stuffs are emerged over years, i even worked about neural networks, fuzzy logic, markov chains, etc. i used parallel computing from gpus. Witnessed gpus how effective on cryptos, saw huge potential of AI. And i used this insight to but NVDIA. I gain nice profit, then i exit. 3x 4x even 7x happened. I missed them.
Then i saw tesla autopilot capabilities, low price stocks, enter the TSLA, after nice catch, i made exit. 3x happened.
Then i saw rigetti computing while it was 1 $. I made investment, waited, saw 100 M$ initiatives in the end of 2024, then i made exit after nice catch of 2x, and boom 20x , 40x, 60x
Then i saw the intel investment on infrastructure, saw chip turmoil, bad manners on intel, saw opportunity and bought, nice catch and made exit again and, yes boom 5x.
Why did i missed the awe moment? All investments are came from CAGR forecasts, gartner hype cycle estimation, supply chain analysis, pestel analysis, porter analysis, even tam sam som, everything is okey, but exit timing is awful. Why? Is there any suggestion? Both decisions made sortino and sharpe around 0.6-0.7 and i aim to made strategy to improve these values.
Thank for reading and concerns :)