Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (19519)	8/9/2004 11:21:28 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78603

So many people would rather take a short-term loss than go for a long-term gain, it seems. I'm no fan of Investor's Business Daily with its No 5 rule: "Cut every loss when it’s 8% below your cost. Make no exceptions so you can always avoid huge, damaging losses. Never average down in price." It has been hard for me to accept that there are a number of equally valid ways to investment success. I am one who looks for a normative approach -- what is THE best way for the average investor? (Or even is there a one best way?) If there are equally valid approaches though, then it is my opinion that each investor must determine if he/she is by nature or temperament an "average up" investor or an "average down" investor. Or maybe one just chooses the much rarer (I presume) case of plunking it all down at once and making no adds or subtracts. One could also avoid the issue of what to do with fluctuations by making time dependent buys (ala DRIP investing). ------------------ It seems to me that many people who put so much credence in doing good DD before investing seem to blow it by scaring themselves out of positions afterword - they let Mr. Market's low price determine their exit point. ------------------- OTOH, I could be very wrong in my opinion. Plus, I'm not totally consistent. I'm still holding - but not adding to - IACI, UTSI, maybe others that've had severe drops recently. And I'm trimming, not adding to, my very small ABT position when it's down here at lows. Each stock situation is different, but for me, my general proclivity is to add when stocks are down (assuming I have funds to do so, and I'm not so beat up or scared to act). For me this has generally worked out satisfactorily. OTOH, there HAVE been instances when I've continued to add to a position and the stock has just fallen into bankruptcy. Ignorance and/or stubbornness can be dangerous!