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

To: Madharry who wrote (39806)	10/28/2010 10:06:13 AM
From: Paul Senior	Read Replies (1) \| Respond to of 78464

Avg. down and pyramid up: I generally decide before I make an initial buy which way I will go, or if I won't add at all. Since being mostly a value investor I am buying stocks when they are down and often when they are dropping, I tend to want to lag in (average down) on my buys. If I were investing in themes - for example believing commodities will increase - for example your bets that silver will continue to rise and/or mines developed, or my bets that oil shale properties will continue to be in demand and be developed -- then as those themes seem to come to fruition and provide confidence, then I will want to increase positions. To me it seems there are many more companies that revert to mean values with changing management or business cycle, than there are companies that fail to do this and go bankrupt, so it's an overall profitable strategy to average down, even assuming I'll get the occasional terrible clunker. As far as "working out better", I'd guess averaging up has worked out better, because there's profits all the way up on every addition purchased. Plus sometimes, since I just seem to have more confidence and enthusiasm with such stocks, so the buys are bigger (than with avg. down buys of downtrodden stocks), and so the gains seem to be bigger too. And faster. Of course, all this jmo based on my memory of what my experience seems to have been.

To: Madharry who wrote (39806)	3/9/2011 12:39:01 PM
From: Madharry	Respond to of 78464

px.v pelangio. has dropped a lot frm its high of around $1.25 i added another 10% to my already significant position at around .72. this is not a value play but it is potentially life changing speculation. i just listened to an interview with the ceo who i have met several times, with jay taylor as of 3/8/11. their gold acreage in ghana is compelling and if this pans out I expect it will be a multibagger frm here. they own two properties in ghana the most recent one is 100 sq km, they have explored 5 km, and on their first exploration of 4 targets, all hit gold in muliti gram ammounts, ( thats what quickly pushed the price over a buck). the othere property is 250 sq. km and that is what brought them to ghana in the first place. I suggest that anyone interested in this speculative play find an listen to the interview. it starts about the 8 minute mark.