🟨 Case against Averaging Down - Stage AnalysisAveraging down is rejected by all big Market Wizards.
The problem is that the stock can always go another -90% down.
The example of SKLZ shows that after 19 consecutive times the stock decreased -20%, it no where near the average dollar price, if you buy same amount after each 20% decline.
In fact, it has to move +300% to get to break-even. How many of your stocks do that?
Do you see now, why probabilities are not in your favor.
PS if you think this is just a crappy company look at $GE in 2007-2009.
