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

To: Madharry who wrote (27867)	8/22/2007 11:15:48 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78748

Here is a difference between techniques: Someone like yourself comes across this stock, evaluates it, decides it is a very good buy for the portfolio. Tactically the portfolio is structured to hold, say 12, maybe 15 key stocks or maybe just 12 or 15 stocks in total. Therefore the position when taken, will be relatively large. When gains show - if they do - they will be significant to portfolio performance. I've not gone back to look at initial discussion for this stock, so I'm just guessing initial buys might have been made in lower/mid $20's or even lower. The stock has moved up so $ gains (relative to portfolio size) have been large from a combination of large initial position and good percentage appreciation in the stock. My consideration was this: I've no real information how this relatively obscure company actually will see money from its business(es). I do see where the WYNN holdings are reported as a significant asset. So my bet is on WYNN's possible (probable?) good Macau performance that might propel this stock too. How much I do not know. My idea was that if things actually work out favorably, the stock should/could/might rise over time. I would know more (maybe) as the situation unfolded. So my tactic has been to enter for a small amount, and watch the story and the stock, and add to my position if/as the stock rose. Which is what I've been doing. I presume (rightly or wrongly) that the stock's rise is confirmation that the company's investment in Macau (WYNN) and Japan are validated by others who've come in to buy the stock. I don't get the big $ profits by averaging up small from a small base, but I didn't take a big initial risk either. (Well, I saw it as a risk.) I'm okay with adding as the stock rises, but otoh, my cost basis keeps rising too, so if the stock drops greatly, I recognize I could sustain losses (Losses which somebody who bought all shares at 2/3 of current price might not experience.) I mention my tactic with this company/stock only to illustrate a case where I have planned to average up if/as the stock rose. Regardless of averaging up or not, or averaging down or not, my overarching philosophy holding a diversified portfolio is that it is better to be in a stock that could/or might/or will do well if only for a few shares, than to out of it totally and so miss out and get nothing. And of course, going forward, I hope this stock continues to perform well for all of us here who are in it, Madharry.