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Microcap & Penny Stocks : Tokyo Joe's Cafe / Anything goes -- Ignore unavailable to you. Want to Upgrade?

To: PatiBob who wrote (4781)	4/6/1998 5:08:00 PM
From: Joe Copia	Read Replies (1) \| Respond to of 34592

Average down means this: you buy 100 shares @ $1. = $100 price drops and you buy 100 Share @ $0.50 = $ 50 now you have 200 shares at an "averaged down cost of $.075 $175 divided by 200 shares. joe PTG&LI !!! allstocks.com

To: PatiBob who wrote (4781)	4/6/1998 5:57:00 PM
From: Raj Ramaswamy	Read Replies (1) \| Respond to of 34592

Pat, When you buy a stock say 1000 shares at 12 dollars and the stocks goes lower say to 11, your cost basis is 12000 but you have a paper loss of 1000, right ? Now you may want to buy some more, again say, 1000 at 11 dollars. So total you would have 2000 shares at 11.5 per share. Net effect is, you have brought down (averaging down) your cost per share from 12 to 11.5 by buying more at dips (when stocks goes down). Of course all this assumes that you are hoping for the stock to come back which means you hope to make more profit at higher prices. Hope this helps. Raj