When buying stock, there is a widespread saying, namely It's not a loss until you sell. This implies that the price at which you bought is relevant. However, I think that once I have bought the stock, it is completely irrelevant at which price I bought (as it is sunk cost). Am I missing something?
A similar claim I often hear in this context is that patience often pays out, and in particular that one should not sell immediately after the price dropped significantly but wait until it recovers. Is this claim somewhat theoretically or empirically backed up or just (possibly wrong) intuition? If it was true, wouldn't that imply a way to "beat the market" by simply buying after the price dropped? I think one problem of that claim is that one does not know, when the price has finished dropping.
So in summary: Is there some truth in the saying It's not a loss until you sell?