What is the concept of sunk costs in financial psychology?

Millions have already been burned on a bad investment project, but out of attachment to the initial investment, you choose to continue adding funds. You: This is the gambler's fallacy, using "future real money" to honor "past bad debts." Cutting losses in time may seem like a loss, but in fact, it is a ruthless liquidation to preserve principal; not adding more is the biggest profit.

Your holdings are stuck at a 50% loss, holding on tightly in hopes of recovery, reasoning that "as long as I don't sell, it doesn't count as a loss." You: The market has no memory; it simply doesn't care what your cost basis is. Unrealized losses are still losses. The biggest damage from holding onto bad assets isn't money, but opportunity cost—you lose the time to catch the next hundredfold coin with this money.

Having accumulated ten years of experience in a sunset industry, knowing it has no future but not daring to switch careers, feeling that giving up is too regrettable. You: The heavier the historical baggage, the slower the turnaround. If your experience is based on outdated logic, then it is poison in your new era. Past time was used to buy cognition, not to build your own tomb.

The highest realm of rationality is to reset yesterday to zero, acting like an outsider with no past, making decisions solely based on current interests.