"One thing we've learned is, if it's clear that something is a mistake, is to fix it quickly. It doesn't get better while you wait." Charlie Munger
Where it pertains to money and investing, I think there are 2 key words here. CLEAR and MISTAKE.
What constitutes a MISTAKE in the first place?
What is NOT a mistake:
- Share price coming off (unless you are trading)
- Short term hiccups in performance
To me, mistakes would be:
- When my reasoning for the investment is wrong
- When there is a structural change in the company's fundamentals / prospects
CLEAR is sometimes harder to tackle. How much clarity do you need? This might be a preference issue. One way to tackle this might be to not think in absolutes. For example, why do you need to be all-in or all-out? It is definitely possible to scale in or out of investments slowly as things get clearer (ie whether things are getting better or worse).
And if you realise it is a mistake, the faster you fix it, the better. There are always opportunities around the corner.