Anavex Life Sciences Corp (AVXL)

[Investor2014]

Maybe the $AVXL risk has gone down, but the impact of an adverse risk event has gone up.

Certainly in the relative sense one can now lose say more than 10 times the value of the original investment if that was at $2 per share. I think that would feel unpleasant.

In an absolute sense by not rebalancing, one could likely not be worse off than 5 or 10 years ago whenever first invested in $AVXL. If on the side one has also traded $AVXL that could well exceed the time value of a complete reset in share price.

Now rebalancing by selling say 50% of $AVXL perhaps on 10 times gain would lock in a great return.

The question is then whether the fear of loosing out on another 1000% gain is greater and importantly more impactful than potentially loosing a large proportion of the paper gains shown on the current broker statement.

In a biotech portfolio the risk that any one stock takes a near 100% nosedive is far greater than the possibility than one see thousands of percent gains in a ‘we got this’ manner.

Alas this is the human investor’s condition and we takes our picks.