Finance
Separate a decision from its outcome, and leave sunk costs behind.
Thinking practices that matter here
- Judgement & Decision-Making
Decisions and outcomes
A careful choice can turn out badly, and a reckless one can get lucky.
- Judgement & Decision-Making
Sunk cost
Money and time already spent cannot be recovered by a worse next step.
- Judgement & Decision-Making
Opportunity cost
The cost of a choice includes the best thing you do not do.
- Evidence & Epistemology
Base rates
A striking result still sits inside how common the thing was to begin with.
A sample scenario
A position has already lost money. What should decide the next trade — the past spend, or the outlook from here?