Although I don't have the numerics to back it up, I have a strong feeling that 30% drop does not stimulate a "Strong" recovery? That's definitely my view.
CSS - Went from 21.5 cents to 7 cents, recovered to now 17 cents.
CXS - Went from 69 cents to 27 cents, recovered to now 42 cents.
NOD - Went from 70 cents to first 30 cents, then no real sign of recovery from there.
There has to be some science there. There has to be.
Even if it's a 50-50, in theory then, I could just invest money whenever something crashes and make sure I always put a stop loss on the half that continues to go down.
My theory is this - If I have $100, then(below is imaginary scenario, recurring over and over)
CSS crashes, I buy at low point($100), it recovers, I now have $140(assume 40% recovery). Cash = $140
NOD crashes, I buy at low point($140), it doesn't recover, but I put 10% stop loss on it, close out at $126. Cash = $126
CXS crashes, I buy at low point($126), it recovers, I now have $176(assume 40% recovery). Cash = $176
Stock A crashes, I buy at low point($176), it doesn't recover, but I put 10% stop loss on it, close out at $158. Cash = $158
Stock B crashes, I buy at low point($158), it recovers, I now have $221(assume 40% recovery). Cash = $221
