Addicted to Average Down?

[nukethewhales31]

Quote from Pension_Admin:

Here is an article how how average down messed up everyone's life.

http://www.thestar.com/News/Ontario/article/609885

So, the question I have is: Is average down addicting?

its from canada ... ignore lol

 

[Candace]

Does everyone agree that averaging down is acceptable when investing?

 

[NoDoji]

Quote from Candace:

Does everyone agree that averaging down is acceptable when investing?

Only if you're averaging with the trend in your time frame. If the trend line in your investment time frame breaks down, you should scale out of the position IMHO.

 

[christianhgross]

Quote from Candace:

Does everyone agree that averaging down is acceptable when investing?

IMO only if you are doing contrarian investing with a given risk profile where a lower price means a better bargain.

 

[Scataphagos]

Quote from Candace:

Does everyone agree that averaging down is acceptable when investing?

Amazing how you could come to such a conclusion.

If you were to take a poll of long-time investors who manage a significant amount of money (especially their own)..... it's likely the result would be more like, "it's NEVER acceptable to average down"...

 

[NoDoji]

Quote from Scataphagos:

Amazing how you could come to such a conclusion.

If you were to take a poll of long-time investors who manage a significant amount of money (especially their own)..... it's likely the result would be more like, "it's NEVER acceptable to average down"...

I really think the time frame is the important thing. Investors who started and added to positions during the crash and secondary dip to March lows may have been averaging down based on stocks being fundamentally on sale at bargain prices, knowing that in their 5- to 20-year investing time frame they would make a killing.

 

[Scataphagos]

Quote from NoDoji:

I really think the time frame is the important thing. Investors who started and added to positions during the crash and secondary dip to March lows may have been averaging down based on stocks being fundamentally on sale at bargain prices, knowing that in their 5- to 20-year investing time frame they would make a killing.

Oh, then let me amend the premise...

"It's NEVER acceptable to average down... unless you're 100% SURE your stock is going to bounce back really, REALLY big (you know, so that you can make a killing)..."

 

[NoDoji]

Quote from Scataphagos:

Oh, then let me amend the premise...

"It's NEVER acceptable to average down... unless you're 100% SURE your stock is going to bounce back really, REALLY big (you know, so that you can make a killing)..."

Nothing's 100%, but stocks trading below their NAV were a pretty good long term investment bet.

 

[Scataphagos]

Quote from NoDoji:

Nothing's 100%, but stocks trading below their NAV were a pretty good long term investment bet.

You apparently don't understand the reason for not averaging down... some day, you will.

 

[Now is Now]

Who knows what is underneath...other than 0