Fair point Slava, but 2008 to me is classified as extraordinary circumstance at a minimum.
Quality businesses dropped in value, and it represented a once in a generation opportunity for those willing to be buyers. I certainly doubled down on certain companies then, and purchased some that I viewed as strong, yet undervalued as a result of the ongoing crises.
I think it is foolish to think that the average investor is able to beat efficient markets. I'm sure you are aware that asset managers that are able to consistently generate alpha are few and far between. Most that have an up year, are more than likely to have an offsetting regression the next. Those that are able to consistently generate above average returns are the exception to the rule, and are compensated accordingly. The general public is not able to beat computers and algorithms that trade on micro movements in milliseconds, it just doesn't happen.
Doubling down to me is confirmation bias. To throw more money at a stock that is declining, and has shown a trend of declining, is like going to the casino to make back the money you lost at the blackjack table the night before.
|