Esteban. I know where you are coming from on averaging down, but I can't say I completely agree with you. I think it depends upon your current assessment of a given stock. Before I average down I forget any prices I've previously paid and attempt to look at the company anew. Then if, upon fundamental review, I decide I would buy the stock now (or at a preset lower price) in preference to others I am interested in, I do so gladly. Sure it blows up in my face occasionally, but so does virtually any other course I pursue. Happily, I bought and then averaged down in RECY three times. I attempt to average up on the same basis.
IMHO several of the POWs merit such study. Right now I am holding some cash in case we get another one of those 250 point drops that make a few large caps look unresistable again. However, if the Market settles, and it becomes apparent micro caps are back in favor, I won't hesitate to either buy back into or more of a couple of POWs.
Talking trading, there are additional advantages to averaging. One, you are dealing with stocks you presumably already know well; and, two, you, like INSTOCK, are reducing the tendency to hedge against yourself by putting your eggs in too many baskets.
Raving on,
OH |
