Investor A buys stock at $10 , it then drops to$ 5 . Now “smarter one” buys the same stock at $ 5 and it then drops to $1 . First investor lost 90% and second , the "smart one ", lost 80% . Numbers are numbers , buying cheap and cheaper means nothing unless you have a stop .
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I agree if you’re trading. But if you’re buying stock with the mindset of owning a piece of the underlying business, buying it cheaper (relative to the value of business) is a great thing.
Ricky my old mate , your " relative to the value" is something very illusive and full of estimates and hope . On the other hand price si the price and something is only of value what someone else is willing to pay for it . If “value” is really more than the SP it will soon show in the price too , if and when that happens and the move upwards starts , I will climb on that bus . I see no point in climbing on the bus that isn’t going where I want to go . Best
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If and only if you fully understand the reason for the drop the risk of losses is lessened.
There is a fine line between catching a bargain and a falling knife. Best to know which it is.
Old fool like me has come to terms that SP can stay subdued for many months and even years , sometimes with no valid reason . Cost of that "tied up money " is big , considering high growth environment we have been for last 10-12 years . I wait for move upwards and if it whipsaws, I get out at a small loss again . I don’t mind doing it two three times on one stock at a cost of few % because when the turnaround works … it pays many times over . Even if it works the first time and I start “pyramiding” money in , I move my stop with the move . Not losing money or losing very little is what its all about for me when investment starts . Once it is established that stock is on the right track ( with news, reports and sheep following ) I relax more and make Monthly EMA or 200D line the very bottom I am willing to accept.
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I do not believe in the concept of “No valid Reason”. The market by definition prices in all risks and upside it can find, so the butterfly flapping its wings in Venezuela affects prices. The reason there may be no volatility in a price is a reflection of stability or balancing of a lot of relative factors that have an influence. Not saying there is anything necessarily wrong with your approach and the iron test is of course your performance over a long period. That is what Sharesight will tell you.
Nice one G . For me results are important but being 67 I need good “sleep at night investing” so if anything goes below Monthly EMA or 200D I get rid of , and wait for it to climb up above the lines . I don’t want to be in the stock that price doesn’t confirm for weeks and sometimes months . Life is too short , for us older ones 
Yes, whipsaw can be a bugger but I don’t mind paying commissions to get piece of mind . Best
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