$40 cents club, page-1713

martyburgo - many years ago I suggested a mate buy some shares in a company which I thought was highly undervalued at around $20. He agreed with the logic but wanted to buy when the shares went sub $20.

They never got below $20 and he never bought them. Needless to say, the share-price more than doubled over the course of the next two years.

I guess the lesson is that if you're convinced a stock is oversold and you're prepared to invest a few more dollars into it, it's worth considering doing so bit by bit rather than just splashing out in one big hit. I think technical term for this rather old-fashioned common-sense approach is called averaging-down. Of course if the stock hits its bottom and starts rising, what you're effectively doing then is "averaging up".