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Moolah
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Posting #21: Wed Oct 10th, 2007 02:45 |
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Consequently if the stock you bought goes up, then you were right in buying it at the first place. Isn't it natural to want to buy more of your "right pick" ?
I think that would make cow sense. :s25:
Cos the market is telling you that you are doing something right or at least the market is agreeing with you.
So how does one wants to add more?
Do one base their buying 'more' based on the discount based on the current price versus the precieved value of the stock?
I guess that would make sense... but how many methods are there of adding more? 'Time' based buying or price based 'buying'?
are there even other methods?
any1?
:s3:
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hhc1977
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Posting #22: Wed Oct 10th, 2007 07:35 |
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my 2 sen
I do average up. All purchase is considered new position and i only average up when the current scenario still make sense to me. I dont average up just bcos it showed me profit but rather the current entry (albeit at higher price) does have its own justification.
And, remember, trend is your best friend.
Regarding average down, it's a little bit more tricky on how you define them. Sometimes, i will mark a price band for nibbling when i am buying on support line. But if it violates the price band, i will abandon the position as the market is telling me i m wrong. Of course, the darkness hour is just before the dawn. So, if there is a bear trap, i will reverse position in a vengeance.
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stockraider1
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Posting #23: Thu Oct 11th, 2007 15:38 |
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For me, I make more money from averaging down, then pyramiding up.
This means going agst the trend....!
The key to success is stock selection based on businesslike investment approach and to take advantage of Mr Market temporary over optimism and pessimism.
Also need to do regular pulse reading on financials to ensure the present analysis is still valid.
Also must have patient and adequate resources set aside at least 3 years for investment so that mkt cannot affect us during the difficult period.
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WarrenJ
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Posting #24: Fri Jan 18th, 2008 04:43 |
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I do both average up and down depending on company fundamentals.
Average up
I try not to average up until my cost price matches the market, meaning when the price goes up gradually I buy in reducing quantity of shares, however I will stop when the price reaches a value (usually I use PE as a simple guide ) and see how the prospect of the company move , it is hard to extrapolate.Issue here is have my initial purchase large enough for me to buy more shares averaging up, say my first purchase was 3000 shares then my method would limit my future purchases as I would be buying lesser amount of shares as compared to 10,000 shares then my next purchase can be more. Well, my case is that I am a small investor with limited capital, so buying 3000 to 2000 shares for 2-3 bucks is big $$$$.
Average down
I would buy more to move my cost to market price, if company fundamentals has no issue, in this case I will buy more shares when prices decline.
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Moolah
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Posting #25: Fri Jan 18th, 2008 08:06 |
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Average down
I would buy more to move my cost to market price, if company fundamentals has no issue, in this case I will buy more shares when prices decline.
Warren,
Here's my one sen... during my buying-in period.... i would surely want the share NOT to move up... and i will surely be over ze moon if the share actually declines...
but....
I am realistic enough... to understand ... that I could be wrong... so from this perspective... say... 6 months after completing a buy-in of a share and the share continues to decline... now, if this happens, most of the time, I will refrain from buying more and i will subject the investment into this stock with much more scruntity. And the question I will surely consider at this moment of time is WHAT IF I AM WRONG IN MY JUDGEMENT!!.
Cos if I arrogantly buy more and stubbornly insist I am correct (when deep down, I could have flawed) then such an exercise is simply deadly, for I am only compounding my mistake more by buying more shares.
just my 1 sen.
 ( luv my cincau!)
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