That presupposes you're right. But there's no way to know this for sure in advance, besides which nobody's right all the time. To do as you advocate guarantees that your losses, when they do come, will be maximal.
Re:Trader Made Billions on Subprime
by byrneseyeview on Wednesday January 16, 2008 @08:22AM
(#99202)
Whereas your trading strategy presupposes that someone else is right, but that they persistently under-react.
I find it more intellectually appealing to make my money taking a stand than to make it by saying "Me too, me too!"
If you trade on value, you shouldn't really care what the market is doing. If risk is mispriced, buy more, even if the price is going down and you are losing money in the short term.