Q: my public service announcement
re: saeed's question on averaging down
ugh, how many times have i done this only to regret it
i share this only to help others with this predicament
here's my figuring
as noted you own 1 share at $51 and are prepared to average down to $30 in order to 'not lose money'
therefore you will need to buy 6 new shares at the current price of $26 in order to bring your acb to +/- $30
6 x $26 + $51 = $207 (@ 7 = $29.57 ACB)
then, if the price increases to $30, you break even
the question is " you are already wrong on this company, so do you really want to triple your investment ($26x6 = $156)
trust me, i have done this many, many times (way in the past) and this is the epitome of throwing good money after bad
most often it is best to take your lumps and as peter says, move on and find something in an uptrend
good luck
re: saeed's question on averaging down
ugh, how many times have i done this only to regret it
i share this only to help others with this predicament
here's my figuring
as noted you own 1 share at $51 and are prepared to average down to $30 in order to 'not lose money'
therefore you will need to buy 6 new shares at the current price of $26 in order to bring your acb to +/- $30
6 x $26 + $51 = $207 (@ 7 = $29.57 ACB)
then, if the price increases to $30, you break even
the question is " you are already wrong on this company, so do you really want to triple your investment ($26x6 = $156)
trust me, i have done this many, many times (way in the past) and this is the epitome of throwing good money after bad
most often it is best to take your lumps and as peter says, move on and find something in an uptrend
good luck
5i Research Answer:
We agree that average down is not typically a great strategy. There are always exceptions, of course, but when an investor is 'wrong' at $45 it does not make them 'right' at $25. There is (usually) a reason for the decline. The decline itself makes holders 'angry' and more likely to sell. A general exception is when a market event makes 'everything' go down and there is no specific negative company news to account for the decline.