PAR: I appreciate your views, I was simply commenting on what has worked for me over and over again. I'm not trying to brag, but about a year ago I acquired a very large position in UCOMA at about $10/share when cable stocks were out of favor. When others were selling I was buying. It is now trading at $72. I could give you numerous other examples (e.g. LMG.A which recently did a 2:1 split).
You asked the question "if a stock is going to $100 then does it really matter if you buy at $5, $10 or $25?" In my opinion, it makes a HUGE difference. If I have $50,000 to invest, I can get 10,000 shares at $5/share. If it goes to $100/share then my original $50,000 investment grows to $1 million. At $25/share I can only buy 2000 shares with my $50,000 original investment and if it goes to $100/share then my investment grows to $200,000. This is a $800,000 difference which in my opinion is a big difference.
Multiples are critically important (e.g. compound interest). By way of example, if I invest $20,000 in DDEQ at $4/share and it goes to $20/share then my investment grows to $100,000. If I invest $20,000 in DDEQ at $10/share and it goes to $20/share then my investment grows to only $40,000. In both scenarios my downside is the same: a maximum of $20,000. Perhaps I am greedy, but I prefer 5:1 and 10:1 returns over mere doubles or triples. Of course (as Chuck Rubin and stockman scott pointed out) the company has to be a good investment. I am not debating the merits of DDEQ here, I am simply responding to the question you raised with regards to whether it makes a difference as to the price an investor buys into a stock.
I cannot criticize your strategy if it has worked for you. I wish you continued success in your investments and trades. I was simply trying to point out what has proven to be very successful and profitable for me and my family. |
