Being on the wrong end of a record-setting game such as this one can be debilitating for a team and its players, particularly given the media maelstrom that results.
A short memory isn’t only useful for baseball players. Consider the football quarterback who has to get off the ground and call the next play after getting sacked hard deep in the backfield. A QB can’t lose focus on the next play because he’s worried about getting blindsided again by a linebacker the size of a small SUV. He has to forget, move on, and then repeat as needed.
"If you went and polled the elites of the past and now, they would all tell you they have a short memory, good or bad," Pittsburgh Steelers quarterback Ben Roethlisberger told the Pittsburgh Post-Gazette in December 2014. "To me, it's every series, every play, you have to kind of start over and start back fresh."
When it comes to making decisions to sell underperforming stocks from their portfolios, investors can benefit from short memories, too.
Because investors recall the history of their relationship with a stock, they balk at shutting down a position that’s not working out. They focus on their losses—how much they have lost on the stock since they purchased it. Instead, they should be considering the future instead—what is the likely upside scenario from the current price? The loss, whether realized or unrealized, is still a loss, and the potential appreciation prospect from this point must be reduced from the prices set by the initial analysis.
An investor who doesn’t reduce expectations at this point is making an unrealistic demand that the stock increase its share price at an even faster rate than was first assumed to be possible. In the face of the bad news that has likely driven down the price of the stock, there is likely even more uncertainty surrounding the stock, so it’s imperative to take a fresh look at the company, wiping the memory slate clean.