You Are Adding at the Wrong Time. Here Is When to Actually Add to a Position

Why most investors add to positions at exactly the wrong moment and the three conditions that must be present before adding is justified.

Most investors add to a position when it falls because it feels logical. If you liked it at forty dollars you should love it at thirty-two. But that logic assumes the only reason the price fell was that it became cheaper. It ignores the possibility that something changed in the business or the market's assessment of it. Cheaper is not always better. Sometimes cheaper is the beginning of much cheaper.

There is a right way to build a position over time. It looks nothing like what most retail investors do.

In this episode we break down the three conditions that must all be present before adding to any position is justified and the correct structure for building a position that compounds rather than collapses.

• Why adding to a falling position feels comfortable and why that comfort is the danger
• The scaffolding rule — why each new layer only goes on after the previous layer proves its integrity
• Three conditions that must all be true simultaneously before adding is justified
• Why the correct position structure is a pyramid and why most retail investors build it upside down
• What to do when a position doubles and why that moment requires a decision not just a feeling

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