Repurchase bias

Once Bitten: Why Investors Won’t Buy Back a Stock That Burned Them

There’s a stock you used to own. You bought it with conviction. It went against you. At some point you’d had enough, so you sold it at a loss, licked your wounds, and moved on. And now you won’t go near it. Not because it’s not investible, but because the very idea of buying it back makes you wince. You’re treating the stock like an ex you’ve blocked. It did you wrong, and you are never, ever speaking to it again. I saw this in myself when I managed money, and I’m seeing it come up with managers again and again when we talk about cutting losers: they’re aware that if they cut, they are unlikely to get back in again – what if it finally starts going up and I miss it? ….[READ]