Judgement is required to sell a winner.
Judgement is required to sell a stock that has not recovered.
At some point, everyone throws in the towel.
Even the most tolerant investor's patience can ultimately be exhausted.
There are always other places to invest the money.
A realised loss has at least some tax benefits for some investors.
A depressed stock in the portfolio is just a reminder of a mistake.
What are the triggers?
- A deterioration in the assets beyond what was initially anticipated.
- A deterioration in the earnings power beyond what was initially anticipated.
- The stock may still be cheap, but the prospects of recovery have now started to fade.