You are getting fixated on the factors that would bring a stock down 50%...ignore that as these numbers were used as just an example....this is a logic question not a stock question so much...kind of like the plane on the conveyor belt sort of thing
I concern myself with real world problems that will affect a stock/company and let the math take care of itself.
The fallacy here is your opinion. I presume you use this as a reason to average down on poorly performing positions. Otherwise, what is the point of holding such an opinion.