I've observed and experienced this reserved attitude with regards to defending positions we know are sinking, whether it's an argument we're clearly losing online or an investment bleeding value in our portfolio.
The former is much more subjective to justify, since in arguments, ‘winning’ is rarely about facts but about who sounds more confident saying them.
The latter however is where I grapple with fallacies and bias to justify why I should keep an investment position, even when every signal tells me to let go.
"It'll come back," I hear a voice in my head speak. "It has to come back."
But then, why does it have to? Because I bought it? Believed in it and already lost so much that selling now would make it unacceptable?
The thing about falling investments is that some are very good at falling further. My mind goes to this popular saying that if a token drops 90%, it can drop another 90%.
I've not much understood the math behind such a statement until recently. So a coin that goes from $100 to $10 has dropped 90%. That same coin going from $10 to $1 is another 90% drop.
As long as I don't sell, I can tell myself it's just a paper loss. It's not real. It could still turn around.
This is sunk cost fallacy in its purest form and a characteristic here is being too busy trying to break even on a bet that was made six months ago with different information.
With regards to losing arguments online, I've only observed this from a distance but now I see them replicated actively on social media, specifically on X.
I think intellectuals are some of the worst offenders of this phenomenon, perhaps because they've built entire identities around being right. Someone with "PhD" in their bio or "thought leader" of sorts in their description gets cornered in an argument and doubling down becomes almost performance art.
Our identity gets tangled up with our choices.
Although it doesn't sound like this in practice, it seems that when you take a public stance in an argument, you're not just making a claim but also telling everyone who you are, at least indirectly.
You're the type of person who believes this thing or values xyz principles and sees the world this or that way.
By extension, backing down then becomes an admission that you were wrong about who you are, or rather that you didn't know yourself as well as you claimed to.
Thinking it out loud, it's actually a silly way to live, as if people aren't allowed to change and growth means betraying some fixed version of yourself from three years ago.
The pain of admitting we were wrong is sharp and immediate. It stings and embarrasses us for a moment or two.
However, the slow bleed of being wrong also comes with a pain that's diffuse. Chronic. We get used to it the way you get used to a dull ache. And because it's spread out over time, we keep telling ourselves it's not that bad.
But it is that bad. Sometimes worse, as when you finally do cut your losses and realize how much further you could have gotten if you'd just admitted the mistake earlier.
I think about my own portfolio sometimes and wonder how much of it is invested based on current analysis versus past ego. It's an uncomfortable question, which is probably why I don't ask it more often.
Perseverance is a virtue when you're working toward something difficult but achievable. Stubbornness is a vice if one starts clinging onto something that's already failed.
The tip is knowing which one we're doing in any given situation. Then acting accordingly, pain is more so a subjective feeling than an objective reality in this context.
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