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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: StockHawk who wrote (35386)	11/27/2000 10:41:11 PM
From: H Peterson	Respond to of 54805

StockHawk..thanks for taking the time to read my survey and give me your constructive opinions. Dollar cost averaging works, in theory, because it forces you to buy more shares when the share price is low, and fewer shares when share prices are high. The result is that volitility is your friend and even a stock that only partially recovers from a fall can still be profitable. The reason dollar cost averaging fails, in practice, is because many people give up on it when the share prices are down. Precisely when they should be loading up, they are bailing out. I totally agree with you in principal. The problem I had once before was I dollar cost averaged down on a stock that never came back. It fact it was halted and still hasn't been restored. Although I never once thought that QCOM wouldn't come back, I thought maybe it wouldn't come back as soon as it did. At the time I sold, China and Korea situations were being bantered around. I thought maybe it wouldn't start to recover until 2001 and I would have time to build up my equity in other stocks meantime and then if QCOM made another run like it did in late "99" and early "00", I would sell some of them stock and put the profits in QCOM. To my mind your experience points to two possible mistakes: 1. You did not stick with your plan. I did until fear and doubt altered my plan. <G> 2. By placing 100% of your investment in just one stock, you made it just too difficult to stick with your plan. The risk that the one chosen stock may not recover is just too much to bear. I was trying to pull a Lindy Bill but my timing was wrong. <G> H Peterson