Opportunity Costs - Just some thoughts

I noticed a lot of chatter today on the trading floor about missed opportunities related to unrealized gains.
I thought it was good to jot down some notes about opportunity costs.

Definition - Opportunity cost is the forgone benefit that would have been derived from an option not chosen . To properly evaluate opportunity costs, the costs and benefits of every option available must be considered and weighed against the others.

In my personal perspective I try not to look at and beat myself up on what I could have made, how many times have I held too long and lost money? (Spoiler way too many) one aspect I always remind myself is if you are like me, you judge your next plays by your account balance, it doesn’t matter if you have $100 or $1,000,000 you need the funds available to make that next play - When you are upset about what could have made, do you look at what you did with that cash? Is it already reinvested? I always remind myself - Jeff Bezos didn’t do one big deal but millions and millions of tiny ones every day.

This is a bit off the cuff - would love to hear other prospectives -



Any time you “could’ve held longer and made X%”, you could have also just as easily lost your gains by holding.

We all make the best choice that we can with the information that we have at any moment. In such a moment that you chose to take profits instead of holding all the way to Valhalla, you were probably thinking about risk management, and that’s a responsible line of thought and should be applauded.

There will always be another play.

That being said, one strategy you could do to mitigate FOMO is to enter positions where you can take multiples of that position and that way you can trim profits instead of closing all at once.