Revbill:
First let me say I am enjoying our debate on when you should sell a stock. I also want to clarify that this discussion shouldn't be applied specifically to Corel. As I have stated in previous posts in this thread, I am no longer going to do any research to determine of Corel is at the bottom. I don't like what I have already seen, and I am playing other investments that are much more interesting to me.
With that in mind, let me respond generically to your reasoning to stay in a company that is showing a large downward trend ...
Basically, your reason for staying in is because you HOPE that:
1. Takeover at a SIGNIFICANT premium
*Historically, this is extremely rare & you shouldn't count on it
2. Stock climbs to 9.00 steadily
*Well, if it starts on a steady climb, then by all means buy some,
and average up.
3. CEO resigns?? Stock goes up 75%?!!
*I would be very interested in knowing about ANY company where
this has happened. If the CEO was that bad, then the BOD would
have fired him/her long ago. Look what happened to AAPL & NOVL
recently. Same type of company, industry, and CEO... they resigned
and the stock is just where it was before resignations.
4. New blood comes in and figures out how to sell the product line.
*OK, I'll accept that. We agree that this is possible, even probable.
5. BOD purposely underestimates Q4 to surprise stockholders?!!
This just isn't done, and I am sure you were kidding on it :)
>i fully realize that there are at least as many negative scenarios but i'm not sure if selling now is the right thing to do. experienced investors use times like this to average down.
I disagree, again.
More experienced investors DON'T HAVE to average down. They saw it coming, and got out with a 10-15% loss.
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