PLS chart, page-126

Basically it is a mind game in the investment holding period.

Is it easier to get out on a smaller gain after watching the paper gain shrink or get out at a bigger loss right upon entry without even any paper gain (timing or catching falling knife) ?

What you are describing in the Risk-Reward matrix is more akin to proactive trading, bet
$1 and expect the very least $1 reward but this ratio isn't sustainable unless the win-loss is consistently high. Others go for 2-3 RRR and filter out less fav odds against the trade.

WB uses FA to put the odds in his favor then get in on massive chunks and hold for more than a day! His buying blood on the street isn't for everyone and most of all the least informed (us retail investors) who scour internet for freely published articles. If as you say the large hedge has to spend many days and weeks to get set for their position both entry/exit, the same can apply to any investor with a handsome gain prudent to take some 'off the table' because the future is never predictable.

A good case study is APT where 2 years gain was wiped out in 2 month and when the guts were failing, the 'killing' was made for those brave enough. The lesson here including myself is to know what type of investor one is. Given the APT opportunity to use the WB blood buying, I would not have been able to hold after so many multibagger.

Your point 3 is the most important lesson for me and that is never to turn a handsome gain into a capital loss and only appreciated through bitter experience by swapping excuses with more research.

On domestic macros, Scomo jobkeeper is pumping new life into risk market and if one can extrapolate to other economies, we could see the start of a new bull market with the bonus vaccine supercharger!