There are both technical and fundamental merits in averaging down or up into our equity positions. I would not dare venture into this arena as there are more skilled and competent writers who have thrown down their gauntlets and have dug into their entrenched positions. Instead, I would like to contribute an erotic view of this discussion. (Hey you Sir, please put your pants back on. Stripping is not necessary.) Let’s start from our childhood. Can you remember what motivates you more? The pain or fear of getting whacked or caned for making “mistakes”; or the pleasure or joy of receiving compliments and encouragements for doing the “right” thing? We are all different. Some of us prefer or react better to negative reinforcements; while some prefer or react better to positive reinforcements. Average down If we buy a stock at $10 and the market sends us a negative reinforcement by pushing the price down to $8 – what do you do? Buy more of course! Oooohhh baby… Whip me one more time! Lash! More! Do the deed, do the deed! As you wish my Master! Market pushes the price down further to $6, and in a climatic rapture, you buy more! Pain is pleasure! The lower the price come crashing down, the more excited you become. Hey! You have a masochistic bent. Cut the crap about the technical or fundamental merits of averaging down, we both know what you really want – and it’s not about making money. You like the leather whip! Average up If we buy a stock at $10 and the market sends us a positive reinforcement by pushing the price up to $12 – what do you do? Buy more, silly! Honey, more whip-cream please? Slurp! Sweet! Can I have more? As you wish my Highness! Market pushes up the price further to $14. In an orgy induced state of intoxication, you dived into the pool of whip-cream – you buy more! The joy of being proved right! The higher the price escalates up, the more intoxicated you become. Hey! You have a hedonistic bent. Cut the bull-shit about the advantages and logical merits of averaging up, we both know what you really want – and money is just a way to keep score. You like whip-cream! P.S.  My inspiration for this post came about from commenting at Musicwhiz's blog. I was in my usual flippant mood. It just dawned on me that my comment can be a stand alone post itself! Singapore Man of Leisure (welcome to my blog; just google it!) This post was written by a guest contributor. Please see their details in the post above. If you'd like to guest post for TheFinance.sg, feel free to contact me for details about how YOU can share your tips and knowledge with our community.