A note from Daniel

Another simple way to understand the sunk cost effect is to think about investing in the stock market. In deciding whether to purchase an individual stock, all that matters is whether it has positive expected value going forward. Do you believe you're going to make money on the purchase? That's how you do it when it’s a fresh decision, but when you already own the stock and the price has declined since you bought it, you are more likely to hold on to it, trying to win back what you've already lost in the position. But this is irrational. If you wouldn't buy a stock today, you ought not hold it today, because a decision to hold is the same as a decision to buy.

Daniel Quit, page 90 · August 26, 2024 Save to shelf
Notes like this take four seconds in Booksense. Scan the paragraph, it lands on the right page, and comes back for review later. Take your first note

More from readers of Quit

Daniel p. 247

Chapter 11 Summary: • Goals, when set, are a proxy for an expected-value equation, balancing the benefits that you're trying to gain against the costs you're willing to bear. • Inflexible goals aren't a good fit for a flexible world. • With better advance planning (like identifying monkeys and pedestals and kill criteria) and the help of a good quitting coach, you can make goals more flexible, setting at least one "unless" and planning regular check-ins on the analysis that initially led to setting the goal.
Daniel
Daniel p. 247

Chapter 11 Summary: • Goals can make it possible to achieve worthwhile things, but goals can also increase the chances that we will escalate commitment when we should quit. • Goals are pass-fail in nature. You either reach the finish line or you don't, and progress along the way matters very little. • Don't just measure whether you hit the goal, ask what you have achieved and learned along the way. • Set intermediate goals and prioritize goals that allow you to recognize progress along the way or acquire something valuable even if you don't reach the goal.
Daniel

More from Daniel

See their profile
Ultra Successful p. 60

The False Constraints That Limit Your Potential: - How Quickly You Can Scale Whether it's your business or your career, there are unspoken timelines that people accept as gospel.They are all untrue: "You can only really grow at 10% a year." "You need to pay your dues for a decade before getting promoted." These artificial limits keep people moving at a crawl when they could be sprinting or pushing for more. The most successful people I know refuse to accept conventional wisdom about timelines, and oddly enough, they break them all the time.
Daniel

Stop losing the best parts of what you read.

Booksense pushes your highlights back to you for review, so a note from page 174 is still yours a year later. Free on iOS.

Get Booksense free
Daniel on Booksense 5,999 notes 387 hours of reading