In my understanding, the person I was replying to was saying that the actual value of equity isn't relevant, because capital cycles through the economy. I was saying that was absolutely not true, because the only reasons anyone would buy equity is to either 1) because they expect the equity to appreciate in value, or 2) to receive dividends or profit-sharing of some kind.

The situation you described is a reasonable diversification strategy, but you had the expectation of appreciation with each purchase. You hedged your bet, and lost less, but you still believed that each position would appreciate in value.