Averaging down experience

[Wysiwyg]

Good traders will know how and why their trading profits so they will know exactly how long is too long.

Yes, since it a subjective saying then the 'good trader' would know how long is long enough. After all, whom it "matters" to, is the trader themselves.

I am averaging down at the moment.

 

[danbradster]

Yes, since it a subjective saying then the 'good trader' would know how long is long enough. After all, whom it "matters" to, is the trader themselves.

I am averaging down at the moment.

Everybody should be averaging down now with their long term funds / super. In 2-5 years ASX 4000 will have been a distant memory, an opportunity not to have been missed. Sure, the market could fall more to 3500 with bad news out of Europe, if it does then people should work hard to find more money to average down further... Pick only good companies of course.

Are people expected to know when the market will bottom? No. So averaging down is the way to go. Use PE as a benchmark to measure value...

 

[matty77]

So what do people think about averaging down for long term investments, and I am talking long term stocks held for at least 5 years.

I am going to start averaging out on all of my long term portfolio, short term stocks will get sold or I just wont average out on them.

Like others have said, I cant predict the bottom, but what I do know is that probably 50% of my long term stocks are now cheaper than what I had paid for them, like I said I am not into trading these stocks, purely buy and hold.

I think in this scenario averaging out can be a great benefit, especially it you have a long term view AND quality stock that doesnt usually have lots of ups and downs.

Just to note, I will still be averaging up on some and down on others, not just averaging out on the loosers.

Thoughts?

 

[tech/a]

If people are averaging down into trades now rather than BUYING new positions after waiting for opportunity to knock.

Then those averaging down I would argue are just guessing the market.

Personally I sold out of long term portfolio back in 2007 with the ASX at 6000 ish
Havent had a longterm portfolio since and only trade short term discretionary.
Infact currently only indexes--Futs.

But thats what I do--many others fortunately do a lot differently!

 

[damien275x]

What stupid advice, if you have done proper research and understand the fundamentals that are likely to drive your chosen stock price higher in the medium to long-term, and the price falls, you SHOULD be buying more, not selling up.

I have averaged in on most of my positions. Whenever they drop, I buy more. Why? I understand what I am investing in. You would only sell if there was a game changer, and usually nothing changes, the market just swings the other way for a while. If you sell purely because they go down, you probably shouldn't have been in to begin with because you lack financial intelligence.

Investing isn't risky
Investing in something you don't understand is.

A good rule my grandfather gave me is that if people disagree and tell you it's a bad idea, you're probably on the right track, because 99% of investors are just idiots. Don't listen to them

 

[tech/a]

because 99% of investors are just idiots. Don't listen to them

A very astute observation.
I certainly agree.

 

[Boggo]

What stupid advice, if you have done proper research and understand the fundamentals that are likely to drive your chosen stock price higher in the medium to long-term, and the price falls, you SHOULD be buying more, not selling up.

I have averaged in on most of my positions. Whenever they drop, I buy more. Why? I understand what I am investing in. You would only sell if there was a game changer, and usually nothing changes, the market just swings the other way for a while. If you sell purely because they go down, you probably shouldn't have been in to begin with because you lack financial intelligence.

Great advice
I averaged down once (AED), best (and most expensive) lesson I have ever learned.

These guys tried it too, didn't work very well for them either...

James Packer became one of the original shareholders in One.Tel when it was established in 1995 by Mr Rich and his colleague Brad Keeling.
Later, Mr Packer introduced his father Kerry Packer's Publishing and Broadcasting and Rupert Murdoch's News Corp to the telco business.

When One.Tel collapsed, PBL and News lost a combined $1 billion.

Read more: http://www.news.com.au/business/one...ch/story-e6frfmbi-1225800268330#ixzz1o8ElxHjD

Weekly chart below, look at it every time you decide to avearge down would be my

 

[Ves]

Weekly chart below, look at it every time you decide to avearge down would be my

What if you turn the chart upside down?

 

[Solar]

Great advice
Weekly chart below, look at it every time you decide to average down would be my

Why go against the trend? Sell the long trade, accept a small loss and go short.

Solar

 

[So_Cynical]

(11th-September-2011)
I have 3 parcels...and im reluctant to buy more as i like to limit myself to 3 parcels, my average price is 4.48 currently an unrealised loss of 14.58% easy to see how 1 more average down at around 3.65 would of been nice...that opportunity may come around again.

• 4.73
• 4.39
• 3.95

~

Just to near (still in the trade) wrap this thread up..i did get another chance to buy PTM cheap and did so, bringing my average price down to 4.25...since then the PTM share price has rallied hard and closed on Friday at 4.41

So as usual my averaging down experience has been a positive one, nerve racking, time consuming and annoying but eventually positive....im still in the trade and looking for 4.50 so i can get out of the 2 highest priced parcels for break even, 1 winner 1 loser...leaving the last 2 buys in substantial open profit at probably an average price of around 3.90.

My chart from the PTM thread below.
~

 

[tech/a]

Just to near (still in the trade) wrap this thread up..i did get another chance to buy PTM cheap and did so, bringing my average price down to 4.25...since then the PTM share price has rallied hard and closed on Friday at 4.41

So as usual my averaging down experience has been a positive one, nerve racking, time consuming and annoying but eventually positive....im still in the trade and looking for 4.50 so i can get out of the 2 highest priced parcels for break even, 1 winner 1 loser...leaving the last 2 buys in substantial open profit at probably an average price of around 3.90.

My chart from the PTM thread below.
~

You have taken 2 yrs to get just above break even.
In that time you have been incorrect 4 times.
You must be trading very small parcels.
If you traded for an income you'd be eating a lot of baked beans!

 

[sinner]

How's your averaging down experience with APN going?

 

[Ves]

The fairly generous franked dividend on PTM ($0.37 in total for the first entry) probably makes his trades look a shade better.

 

[skyQuake]

Not to mention 'emotional capital' committed. Everyday watch that p/l gap grow wider and wider. A constant drain and worry.

Or take the easy way out. Don't watch it at all!

 

[So_Cynical]

You have taken 2 yrs to get just above break even.
In that time you have been incorrect 4 times.
You must be trading very small parcels.
If you traded for an income you'd be eating a lot of baked beans!

PTM is one of 22 stocks i hold so its not all about 1 stock...first and last parcel big, the other 2 small...trading profits currently make up about 20% of my yearly income with dividends and distributions making up about 12% ~ i eat baked beans once every couple of weeks.

How's your averaging down experience with APN going?

APN is my biggest loser down 42% at the moment..a disaster for sure, terrible timing and 1 of 22 stocks i hold....currently 14 winners 8 losers. see below to get an idea of why my strategy is profitable.
~

 

[burglar]

... i eat baked beans once every couple of weeks.
...

~

You poor thing!
Come to my house, I get three meals a day!!

 

[tech/a]

PTM is one of 22 stocks i hold so its not all about 1 stock...first and last parcel big, the other 2 small...trading profits currently make up about 20% of my yearly income with dividends and distributions making up about 12% ~ i eat baked beans once every couple of weeks.



APN is my biggest loser down 42% at the moment..a disaster for sure, terrible timing and 1 of 22 stocks i hold....currently 14 winners 8 losers. see below to get an idea of why my strategy is profitable.
~

I saw one of your tables a few months ago.
Ill have to find it again.
In it were some shockers where you let 100s of % winners fall back to small % and even losers.
When I have time Ill find it and post comments.
All is not as rosy as it seems.
I to am Cynical!

 

[So_Cynical]

I saw one of your tables a few months ago.
Ill have to find it again.
In it were some shockers where you let 100s of % winners fall back to small % and even losers.
When I have time Ill find it and post comments.
All is not as rosy as it seems.
I to am Cynical!

LOL here's another one for ya...this one is closed trades this financial year.

Seriously i had no idea it looked this good...i dont click the closed trades tab to much.

I forgot to point out that the table in my above post is open trades all time...everything i have open, some big positions but most small as some profit has been taken on most of them so i can recycle my capital.
~

 

[tech/a]

LOL here's another one for ya...this one is closed trades this financial year.

Seriously i had no idea it looked this good...i dont click the closed trades tab to much.
~

So
Can you explain to me why your stats at the bottom of your posts
Shows an expectancy of 67c in the dollar?
Doesn't add up on the two tables you've posted up.

 

[So_Cynical]

So
Can you explain to me why your stats at the bottom of your posts
Shows an expectancy of 67c in the dollar?
Doesn't add up on the two tables you've posted up.

The expectancy comes out of one of the Stator stats pages...its an all time stat where the table above is this FY, i imagine my expectancy on closed trades for this FY would be a bit higher....just had a look and its $2.48

And i though it had been a bad year. :dunno: