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The gentleman below says he is having trouble replying to the RT list.
So, I have taken the liberty of forwarding his reply to the list.
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To: nwinski@xxxxxxxxxxxxxxx
From: "Harley Meyer" <Harley.D.Meyer-2@xxxxxxxxxx>
Subject: Re: Gen: SOD
Reply-To: Harley D Meyer <Harley.D.Meyer-2@xxxxxxxxxx>
Date: Fri, 24 Oct 1997 09:52:25
X-Tick-Nemesis: Chairface Chippendale
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Hello,
I can't respond to the list because of the way the server handles my list. I am
not Don either. I am new to investing but have a similiar view as Don. I look
at it this way. Prices will alway fluctuate up & down. Suppose I buy at the top
& it goes against for some time. Since I know the price will oscillate & I am
comfortable with the current trend I can add to the position at a later date at
a lower price.
Think of it this away. Many long term investors buy the dips. Same principle
applies but this is in a shorter time frame. You just need to have the cash
reserves to be resiliant.
Me personally I only do this when I am going short.
Harley Meyer
On Thu, 23 Oct 1997 14:10:09 -0700,
nwinski@xxxxxxxxxxxxxxx wrote...
>nwinski wrote:
>>
>> Don Green wrote:
>> >
>> > I have decided to short another 1000 shares of BA at 49. It appears to
>have
>> > topped at 49, unless the market REALLY recovers.
>> >
>> > So I am now short 2000 shares of BA with an average cost of 48.75
>> >
>> > With this much money online, I will be quicker to cover my short than I
>> > normally would
>> >
>> > Regards
>> > Don Green
>>
>> Don,
>> I don't agree with this logic. Increasing exposure should not an
>> excuse for reducing profit margins. With only a 1/2 point difference
>> between your initial position and second half of your position, the risk
>> reward profile should be vitually the same. If you call your insurance
>> company and ask to double your insurance coverage do they say "ok, but
>> we will have to substantilly cut your preumium rate"? I don't think so.
>> The same logic applies here. There is an intangible cost involved in
>> every trade called risk. No one knows exactly what the costs is, but you
>> must be certain that you make enough on your winning trades to more than
>> cover the risk and losing trades. Please explain how doubling your
>> exposure cuts your risk so that you can afford to take a smaller profit
>> margin?
>>
>> Fully Exposed,
>>
>> Norman
>
>
Harley Meyer
meyer093@xxxxxxxxxx
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