...the protracted slow train wreck is worse, because one could suffer several rounds of bear market within a larger one.
...besides if it is a crash, one could avoid it by getting out of harm's way in a timely fashion and return safely once the episode ends and calm returns. With the slow train wreck with multiple bear rallies, it is so easy to get blindsided.
...a stock that has fallen 60% could rise 20% and you'd think the bottom is in, only to suffer a subsequent 50% fall. So e.g a $1 stock plunges 60% to 40c then rises to 48c before plummeting to 24c gives a total 76% fall. If you had a 100k qty of the stock at $1 and did not sell, falls to 40c and then rose to 48c, and you decide to invest another 100k at 48c (to average down) thinking it has bottomed, you would have lost $100k from your total investment of $148k when it dives to 24c, instead of just $76k on the original investment ($100k).
...people tend to think averaging down helps, but not if the bear market has not ended.
