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Watch for TURNAROUND TUESDAY after a nasty day on Monday.
----- Original Message -----
From: BobsKC <bobskc@xxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Saturday, April 15, 2000 10:42 AM
Subject: [RT] Re: Dollar Cost Averaging-Lesson learned
> I averaged down on SUPC last year .. It had fallen about $10 to the high
> 30's when I entered.. fell to 30 so I bought another K and then to 20
where
> I added another K. This company had great earnings and was in the
business
> of hospital management which to me, was a growing field and was
desperately
> needed in America. Two days later, the company reported irregularities in
> their books before the open and it opened at $10 as I recall. Just a note
> about an averaging down nightmare. The company knew, the employees, (to
> some degree), knew and who knows how many employee friends and relatives
> knew? I'm not saying that all averaging down is a bad thing but one needs
> to clearly understand the reason for a fall in price and if you don't,
stay
> clear. (At least that's my new motto)
>
> (Fortunately, shortly after this mess I bought 2K of GERN at $12 and sold
> it at $68 and $72 so recovery was short but highly mitigated by my
> averaging down escapade).
>
> People might want to read Abby Joseph Cohen's remarks or listen to them on
> the CNBC web site. She was widely credited for the current over all slide
> and she is now saying that she maintains her projections for the DOW and
> the NASDQ, adding that she is still bullish and the current drop is a
> market condition and not an economy event. That, along with heavy
> capitulation last week and heavy volume Friday causes me to believe that
> after some possible margin call selling early Monday, we may well have
> found a floor. I admit the DOW has not dropped heavily but it did
recently
> and if the NDQ keeps falling at the rate it is, we will be at 0 in three
> weeks. :)) I covered all my shorts at 3:30 EDST yesterday.
>
> Good trading ..
>
> Bob
>
>
> At 11:37 AM 4/15/00 -0500, Michael Ferguson wrote:
> >Long term to me is more than ten minutes. I do not think I have a seventy
> >year time horizon for my portfolio. Now that we have derivatives for
hedging
> >I wonder how the buy and hold might have fared?
> >
> >The best crack I heard all week was: Those 401Ks are now 210Ks.
> >
> >
> >Michael
> >
> >
> >
> >----- Original Message -----
> >From: "Dennis Holverstott" <dennis@xxxxxxxxxx>
> >To: <realtraders@xxxxxxxxxxxxxxx>
> >Sent: Saturday, April 15, 2000 10:25
> >Subject: [RT] Dollar Cost Averaging
> >
> >
> >| Preface - I'm not talking my book here. I don't own any stocks. I'm a
> >| short-term index futures trader. Long-term to me is a week and I never
> >| average down.
> >|
> >| All this talk about scale trading and averaging down, along with this
> >| week's crash, got me thinking about the way many people invest in the
> >| stock market - dollar cost averaging. Lots of people with 401K plans
> >| just contribute an equal amount every week or every month to a mutual
> >| fund.
> >|
> >| We all know what happened in the 1929 crash. The Dow hit its high in
> >| August 1929, crashed 90%, and didn't return to the 1929 high until 25
> >| years later in 1954. So I wondered what would have happened to our 401K
> >| investor if he had been unfortunate enough to open his account at the
> >| August 1929 peak and had the balls to stick with his equal weekly
> >| contributions over the years.
> >|
> >| The gif shows the results. I calculated the profit/loss by comparing
the
> >| average cost paid for a Dow share to the weekly Dow close. Not a pretty
> >| picture but not as grim as the 25 year scenario might lead us to
> >| believe. I think it shows the value to a _very_ long-term investor of
> >| buying more shares when they are cheap and buying fewer when they are
> >| expensive.
> >|
> >| --
> >| Dennis
> >
> >
>
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