Sunk cost

The Obama administration is refusing to sell its stake in GM because then it would realize a multi-billion dollar loss. This fallacy is literally the very first hit if you Google “classic investing fallacy”.

POSTSCRIPT: My accountant points out that if the government followed GAAP (Generally accepted accounting principles), they would have recorded the loss already. But of course the government never follows the accounting rules that are required in the private sector.

(Via IMAO.)

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