Please be positive and upbeat in your interactions, and avoid making negative or pessimistic comments. Instead, focus on the potential opportunities.
- Manlobbi
Personal Finance / Macroeconomic Trends & Risks
No. of Recommendations: 0
OK - first in full disclosure, Softbank is currently one of my top holdings at 3% of my equity portfolio and up over 500% from my acquisition price - and have been doing well with "dangerous" technology investments for a very long time.
OTOH:
https://www.reuters.com/legal/transactional/softba...Jeff
No. of Recommendations: 3
1. Read the book "1929" which your library probably has.
2. Up 500% and now 3% of your entire portfolio?
3. A high-risk company that has agreed to put its own equity at risk if its margin is called?
Time for a little pruning. Maybe more than a little.
Wendy
No. of Recommendations: 2
So I put the question to Gemini (Wendy's favorite AI) and the advice was geared more towards pain tolerance and psychological fortitude than financial:
Gemini:
How long have you held the stock, and what percentage of your portfolio does it represent? (Knowing if you are sitting on a gain or a loss can also weigh heavily on the decision.)
Me:
I forget how long ago I bought it, but it is up 515% and constitutes 3% of my equity portfolio
Gemini:
A 515% gain is an incredible return! Sitting on a massive win like that changes the equation, especially since SoftBank constitutes a relatively small slice (3%) of your total equity portfolio.
Given those specifics, here is how you can look at the risk versus the reward:
1. The "House Money" Perspective
Since you are up over 500%, you are essentially playing with "house money." A 3% portfolio allocation means that even if Masayoshi Son's high-leverage OpenAI gamble goes completely sideways and SoftBank’s stock takes a massive hit, it won't break your broader financial back. The risk to your overall wealth is strictly contained.
2. The Tax Trap
Because you have held the stock long enough to secure a 515% gain, selling right now means you will trigger a substantial capital gains tax event. If you don't need the cash right away, keeping that money compounded in the market rather than handing a large chunk of your profit to the IRS is a compelling reason to hold.
3. A Strategic Alternative: Rebalancing
Instead of a total exit, you might consider trimming your position rather than selling all of it. For example, you could sell just enough shares to recoup your initial investment (which, given a 515% gain, would require selling less than 20% of your current SoftBank holding).
This locks in a guaranteed profit and removes all initial capital risk.
It leaves the remaining "free" shares to ride the upside if SoftBank’s $10 billion bet on OpenAI pays off massively.
The Bottom Line: Because it is only 3% of your portfolio, you are in a luxury position. If you still believe in the future of AI and want exposure to OpenAI and ARM, there is no urgent need to panic-sell. Trimming a small piece to secure your original investment might give you the perfect balance of peace of mind and upside potential.
Me (thinking to myself):
Over the past couple of months, I've trimmed a substantial portion of my equity portfolio (incurring substantial tax liabilities) as good times generally come to a grinding end at some point (I'm figuring 6-18 months) and I would like to go bargain hunting.
Jeff
No. of Recommendations: 5
Boy, I really object to the idea that you are "playing with house money". Shows clearly that AI parrots ideas rather than "thinks".
It is ALL your money and should the thought of and treated as such.
No. of Recommendations: 2
The "house money effect" is similar to the sunk cost fallacy, just on the positive side.
In the end money is fungible and decisions shouldn't consider the source.
No. of Recommendations: 0
Well despite yesterday's NASDAQ dec line, either because of the news or in spite of the news, the stock was up over 3% today - go figure (feels like dot.com all over again - except these guys actually make money - or at least had until now}.
Jeff
