What's your number?
Don't tell me you don't have one.
Every investor has a price seared into their memory. A stock that hit a high.
Maybe you owned it, maybe you watched it run and kicked yourself for missing it. And that number is still sitting there, months or years later, shaping every decision you make around it.
You pull up the chart.
Your eyes go straight to the peak.
And without realizing it, you just made that peak the most important number in your analysis.
It’s not revenue, not cash flow. Not what the business actually earns. A number left behind from a moment that may never come again, like the stain on a basement wall after a flood recedes.
The moment is gone. The momentum that caused the high price has passed. The gurus aren’t as loud as they once were.
But the mark stays. And if you stare at it long enough, you start to believe the price belongs at that level that once was.
I call it the high watermark.
And it's costing you more than you think.
"It Used to Be…"
These might be the four most expensive words in investing.
"It used to be $50… Now it’s $25.”
I hear some version of this almost every week. From retail investors, from friends at dinners, from people who have been in the markets for decades and still fall for it.
And every single time, the same questions get skipped.
Why was it $50? Was the whole sector caught in a mania? Was money cheap and flowing into anything with a ticker? Did a short squeeze jack the price up for three weeks before gravity took over?
The watermark investor doesn't ask any of that.
They see $25 and their brain whispers half off. Like it's a clearance rack and not a broken thesis.
In 2022, lithium spot hit $80,000 a tonne. That was the flood level. Small developers with marginal deposits ran to $5, $8, $12 a share from pennies. Today, lithium sits at around $19,000 per tonne.
If you're still holding one of those small caps because "it used to be $8," you're ignoring that the $8 price required $80,000 lithium. At $19,000, that company's foundation isn't just lower… it's likely underwater. Burning cash and waiting for a rescue.
And it's not just you anchoring to that number.
The funds that bought near the top are trapped too. They'll sell into every rally trying to get closer to their entry price, save their year, and protect their bonuses and jobs.
- That watermark is not a ghost in your head. A watermark is a ceiling. And there's institutional money reinforcing it every time the stock tries to bounce.
And it goes deeper than public markets.
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