Really dumb question about shares

[redwing]

Actually when you are running a loss you can buy more shares so that you "average down" your break even price. I've done this several times, but you must wait (sometimes years) for the share price to reach the break even price.

On the flipside if your shares are going up, you can buy more to "average up".

They could go all the way to zero though (many have) and you've thrown good money after bad

 

[see_change]

Actually when you are running a loss you can buy more shares so that you "average down" your break even price. I've done this several times, but you must wait (sometimes years) for the share price to reach the break even price.

On the flipside if your shares are going up, you can buy more to "average up".

So you buy more shares that have given you a lose in the hope they go up .....

I have heard it mentioned but not by anyone who I'd take seriously ....

last person who suggested that as a technique on this forum ( and was taken seriously by some ) is now bankrupt ... But we can't mention his name ....

Cliff

 

[devank]

May be it can work in betting. First you put $1. If you loose then you place larger amount to recover the lost money. You do that until you win

 

[wategos]

I average down all the time, it is a valid strategy for good companies. Westpac, AMP, QBE and Newcrest recently.

If property prices dropped in a good suburb you owned in would it be wise to buy another? Same thing.

 

[MIW]

They could go all the way to zero though (many have) and you've thrown good money after bad

+1. I thought exactly the same thing, what if the company stops existing as some are no longer present? I think looking back at history it's easy to speculate what we would do, but looking at unknown future is so much different.
As in property, one must adopt a "strategy" and stick to it, but protecting the capital should be the most important point!

 

[MIW]

May be it can work in betting. First you put $1. If you loose then you place larger amount to recover the lost money. You do that until you win

There's always an upper limit you can increase to, I would think?
In black jack it was suggested the other way. When you loose you stay put with the same bet, but when you win you keep increasing your bets. At the end of the day these are still bets, just gambling, right?

 

[MIW]

I average down all the time, it is a valid strategy for good companies. Westpac, AMP, QBE and Newcrest recently.

If property prices dropped in a good suburb you owned in would it be wise to buy another? Same thing.

But timing and knowledge is of the essence, wouldn't you agree? My brother sold AMP at around $17 or $20 (cannot remember), imagine he was averaging down and buying it every year until now, when this share was going down..... (what is it now?).

 

[TPI]

Depends why the share price is going down isn't it?

 

[D.T.]

Depends why the share price is going down isn't it?

My share strategy dictates that I only want to buy good quality companies that are at a discount to their intrinsic value. So, if it becomes an even bigger discount why on earth would I not want more of them?

 

[see_change]

May be it can work in betting. First you put $1. If you loose then you place larger amount to recover the lost money. You do that until you win

ah , so that's the secret

I actually tried that once , on my one visit to Wrest Point .

two problems , there was a limit to my money and on the table .

very short visit about five spins

cliff

 

[topcropper]

I average down all the time, it is a valid strategy for good companies. Westpac, AMP, QBE and Newcrest recently.

If property prices dropped in a good suburb you owned in would it be wise to buy another? Same thing.

Yeah, exactly.

Probably not the sort of thing to do with spec stocks, as they would very likely go to zero, but as long as it's with the genuine profit making, asset owning companies.

Averaging down is just like what any experienced cashed up share investor does in a share marker crash. I put 200k into the market in 20 minutes back in early 2009. All big blue chips. Still hold the lot.

Traders can carry on with all this nonsense with stop losses and charts and stuff. But I'm not a trader, I'm an investor. A lot of my stocks I've owned for 10 years or more, and actually I haven't even bought or sold anything for a few years. I'll certainly average down into blue chips when we get another big crash.


See ya's.

 

[china]

Generally, everytime I open the newspaper and it says "biggest wall street drop in x years/months", I tend to buy some ASX 20 stock. I will then sell it usually within days to months. This has been a profitable strategy for me. Nothing astronomical in terms of absolute money made but gives me a few k each time. I find that this happens several times a year.

 

[see_change]

Generally, everytime I open the newspaper and it says "biggest wall street drop in x years/months", I tend to buy some ASX 20 stock. I will then sell it usually within days to months. This has been a profitable strategy for me. Nothing astronomical in terms of absolute money made but gives me a few k each time. I find that this happens several times a year.

China , That's the smartest thing I heard you say since I've been back on the forum .....

 

[Corey Batt]

My share strategy dictates that I only want to buy good quality companies that are at a discount to their intrinsic value. So, if it becomes an even bigger discount why on earth would I not want more of them?

This.

So long as the underlying investment is sound and pricing is due to variables unrelated to the overall performance of the company and growth in relation to price - it's a valid strategy.

Unless you're reliant on margin loans, in which case you're exposed so much more to Mr Market and his erratic tendencies.

 

[redwing]

Here's a few companies formerly listed on the Australian Securities Exchange


A
ABC Learning
Allegiance Mining
C
Clyde Engineering
Consolidated Zinc
E
Evans Deakin and Company
F
Foster's Group
G
Great Central Mines
H
HIH Insurance
M
Metal Storm
N
Normandy Mining
O
One.Tel
Open Telecommunications
Oxiana Limited
P
Patrick Corporation
P cont.
PIPE Networks
Poseidon NL
R
Rinker Group
S
Smorgon Steel
Sons of Gwalia
W
WMC Resources
Z
Zinifex

 

[china]

Add Babcock and Brown to that list.

 

[pinkboy]

And the most recent:

Forge (FGE)

pinkboy

 

[willair]

I collect old books I have several of The Business Who"s Who of Australia by Riddell,, if one was to study the first edition and go forward a very high % from the first book no longer exist..

http://www.investogain.com.au/company/commonwealth-bank-of-australia

http://connectweb.com.au/shop/biographical-books/whos-who-in-business-in-australia.aspx

http://books.google.com.au/books/about/The_Business_Who_s_who_of_Australia.html?id=J7ANAQAAMAAJ

http://www.investogain.com.au/

 

[D.T.]

And the most recent:

Forge (FGE)

pinkboy

Due to their deceptive conduct, there's a claim process to get some reimbursement though.

 

[pinkboy]

Due to their deceptive conduct, there's a claim process to get some reimbursement though.

There will be no winners.

pinkboy