This does happen a lot among retail investors, and people don't think about the reversal test nearly often enough.

There's a closely related bias which could be called the Sunk Gain Fallacy: I know people who believe that if you buy a stock and it doubles in value, you should immediately sell half of it (regardless of your estimate of its future prospects), because "that way you're gambling with someone else's money". These same people use mottos like "Nobody ever lost money taking a profit!" to justify grossly expected-value-destroying actions like early exercise of options.

However, a bias toward holding what you already own may be a useful form of hysteresis for a couple of reasons:

• There are expenses, fees, and tax consequences associated with trading. Churning your investments is almost always a bad thing, especially since the market is mostly efficient and whatever you're holding will tend to have the same expected value as anything else you could buy.

• Human decisionmaking is noisy. If you wake up every morning and remake your investment portfolio de novo, the noise will dominate. If you discount your first-order conclusions and only change your strategy at infrequent intervals, after repeated consideration, or only when you have an exceptionally good reason, your strategy will tend towards monotonic improvement.