We must take a very close look at this image and fully understand the serious impact of large losses. Once large losses have happened; it becomes verydifficult to recover. It is just Mathematics! We must avoid getting into large losses and the most commonly large losses are due to repetitive averaging down till a single stock position turned into a large percentage of one's investing capital e.g. 40 to 60%.  Often it was too late when we suddenly realized it. Now, Uncle8888 strongly believes he has understood it well. He has learned it first hand from his own investment marathon race from 2003 to 2011 to meet his Yearly Goals. You can see what happened after a large loss in 2008! It became so difficult for him to recover from his large losses. Prevention is better than cure! Avoid large losses. For his next 10-years investment marathon race ......