Capitulation

Capitulation — the endgame of unmanaged loss aversion: selling everything near the bottom, not from analysis but from exhaustion — the “I just can’t watch it anymore” trade. It’s what the missing-best-days data prices: the market’s best days cluster inside the recoveries capitulators just sold out of (miss 15 best days over four decades and 9.72% annualized becomes 7.44%). The 2008 arithmetic from lesson 1.5 is the standing counterexample: $200k → $119k → $364k, for the holder only.

First used in: 2.8 · Behavior under fire