Here is an insight from Dough Kass, I subscribe to the same theory
"I wanted to emphasize something that is obvious to all subscribers that have been around for a while.
As a matter of strategy it is my modus operandi to almost always average into positions (long and short) based on the notion that it is impossible for me to figure out the perfect/ideal entry point.
My sense is that many contributors go all in at the get-go in putting on positions and their first price is close to their average cost.
It is great having that confidence, but after four decades in this business, I simply cant exact that precision.
This means, from the first time I mention a position -- let's use my PowerShares QQQ (QQQ)short as an example -- I am averaging up or down (based on macro or micro factors), and my total cost basis might be (far) different from my original mention.
Again, QQQ is a good example.
I originally mentioned the short at $77.40, but with today's large short add, my average cost is now slighlty over $79.
I hope my approach is well understood."
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