u/vincit2quise

The math seems clear — your break-even % is the same whether you sell now or hold. Example: you buy a stock at $100, it drops to $50. You need a 100% gain to break even. But if you sell and redeploy that $50 into something else, that something else also only needs to double. The position doesn't know what you paid for it. The loss already exists the moment the price dropped. Selling is just an accounting event.

So why do people refuse to cut losses? Is it purely loss aversion, or is there a rational case I'm missing?