Re:Ignore Sunk Costs (2009)
by dannypgh on Sunday January 05, 2020 @10:33PM
(#21966204)
I think this comes down to correlation versus causation.
The fact that someone (perhaps yourself) valued a property highly recently is correlated with that property having a high present value. But it does not cause it.
It is possible the million dollar purchase was a mistake, or that something has changed and it's now worth far less. Valuing a property highly may cause you to have paid a lot of money for it, and that might be a reason to assess the current value highly. But that's very, very different from valuing a properly highly because you paid a lot of money for it.
The fact that someone (perhaps yourself) valued a property highly recently is correlated with that property having a high present value. But it does not cause it.
It is possible the million dollar purchase was a mistake, or that something has changed and it's now worth far less. Valuing a property highly may cause you to have paid a lot of money for it, and that might be a reason to assess the current value highly. But that's very, very different from valuing a properly highly because you paid a lot of money for it.