Suppose you have n shares of stock X, and you're trying to decide whether to sell or to hold onto it for a bit longer; and suppose that if you instead had the current cash value of those shares, you would easily decide not to buy those shares. So it would seem that this amount of money is currently worth more to you as available cash than as shares of this stock. Yet if you already have those shares, particularly if you bought them at a higher price, you may be reluctant to sell them immediately — you'd be inclined to hold onto it in hopes of recouping your loss, even if, given those shares' value in cash instead, you could think of a better use for it than investing it back in the same stock.

Questions:

• This probably happens a lot, right?
• Is this pattern of thinking ever not a bad idea? Or should stock traders consistently apply this sort of reversal test to stocks they already own?
• Is there a name or description for this particular fallacy/bias or is it just grouped with the sunk cost fallacy?