The investor bought both A and B stocks after running a thorough, conservative, DCF analisys and found them both to be trading at a 50% discount.
The underlying fundamentals have not changed, and, as you said, A is 25% up and B is 25% down.
How could I decide to sell B knowing it is soooo undervalued?
If I do trust my analisys perhaps I should sell A and buy B.
I must add that here in Brazil, the small investor will not be taxed in stock market capital gains, under certain conditions.
That is why i just cannot agree with that reasoning.