I only average down when the company has become undervalued.
- This could be their asset backing is higher than their market cap.
- Or the prospect of future earnings, a good example is MGX at the moment. last trade 9.3 c, they WILL (should) be earning 4.5c per share profit within 9 months.
Many reasons to average down and many reasons not to.
The dotcoms were a bad example of averaging down.
