|
PureBytes Links
Trading Reference Links
|
Dear Wong and all,
> Do you on principle against averaging down, no matter what?
Yes, I am against averaging down, Fullstop!!!
If one is long,,, why would one want to add to a loosing position
by avg' down, is one HOPING that the market will start thinking the
thinking like oneself and turn??
A problem with this type of strategy is the "opportunity cost" of
holding the stock/security until it turns if it does turn.
What is cheap?? cheap to what?, does the "market" understand
cheap??
Years ago people where buying sugar when it was near the cost of production,,
WHY? because it was cheap,,,,, then it got to the cost of production and
people still kept buying because it was cheap and they said it could not go
any lower because it is at the cost of production,,,,,,then it fell under the
cost of production, it is a pity that "sugar" was not told
"hey you can't go any cheaper because you are at the cost of production"
Eventually it turned, either people lost alot of money or they had to have
very deep pockets to stay in the game if they purcahsed sugar because it was
"Cheap"!!
REMBEMBER CHEAP IS A RELATIVE WORD.
Average Up,,,,,,,, ADD to a Winning Position,
not a loosing one that may or may not correct given time and deep pockets!!
When is a bottom a bottom and a top a top??
Only after the market has turned and it can be looked at in history!!
Is it better not to weight for a bottom or a top to form as opposed to
"it looks like (could be) a bottom" or "it looks like a top"
Be happy with a 60%-80% of the move, leave some bread on the table for
someone
else, why risk all and try to top/bottom pick.
If one needs to ones to be a hero take up fighting or parachuting!
Be humble,simple and make money, then give some away and make more!
Do not be RULED by FEAR, GREED, and HOPE.
Set the trap and wait
Just my personal perspective,
Stephen from the Great Southern Land,,,,,OZ....!!!!
"simpleman not superman"
|