Holding Onto Stagnation or Growth

Victor Niederhoffer hung out with his Grandmother, Birdie, after she'd retired to Florida. In "The Education of a Speculator," he recounts a conversation with her in his "Everyone Retures to the South" short story/mini-section, where Birdie kept stagnating companies and let go of growing ones.

We reminisced about some of Martin's stock market coups: Air Reduction, Allis Chalmers, American Can. These stalwarts of the early 20th century had been bequethed to her and, like most elderly people in this situation, she had sold the ones that were above cost, only to see them quadruple in the next few years, and had retained the ones that were below cost, such as Famous Artists, Four Seasons Nursing, and Levin-Townsend, which eventually sank into bankruptcy. I asked Birdie of Wolfie's should stock up on pastrami or ham. The pastrami moves briskly. Taking that perspective, it's easy to see which stocks to unload and which to hold or buy more of (pp 57-58)

Clinging to past stagnations and abandoning promising growth areas is easy to do in many areas of life, not just stocks and investment. There may be some residual hope that past disappointments can be revived into greatness. Or, an inability to acknowledge that it was a failure. These phenomenon can keep us from moving on to activities with more potential.