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Yes all good points, I also keep these in mind when looking at...

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Katoom

4,600 Posts.

29/07/15

17:26

Post #: 15715663
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Originally posted by Gillysrooms ↑

I dont believe anyone should average down if a 5 cents drop in sp now only drops the average buy in sp by only 1 cent when the real point should be is it worth buying now because we feel it has been oversold when we still believe based on facts and history that its near time future is going to be surprisingly positive or we might believe the probability that the price will remain at these low levels is unlikely to continue for long and we wanted to increase our exposure. Now of course we could be wrong again in reality if we bought at 54 cents thinking the probability of a lower price was low at that time, but we all know that if the USA indications are declared as very favourable next month then it wont be too long for the sentiment on NEA to change rapidly and we wont be able to buy stock at these levels.

A week is a long day in politics and so too can the ASX change vey rapidly. Holders in NEA must still believe holding the shares is still good value for potential capital gain even if they showing a loss from their original entry point. I have observed that sometimes and many times the low for the day might have been struck on a crossing or a very low number of shares, so chasing the bottom to save 2 cents may result in missing out altogether or by 5 or 10 cents and the reverse can occur when deciding to sell.
You Katoom on the other hand want to see actual series of improving results before committing funds and that's not a bad way of doing it either and you might still have time to buy into a good growth stock at these low prices anyway after the initial euphoria subsides but most times you would end up paying a premium for wanting to be sure of the positive progress whereas current holders are more prepared to speculate on a positive result next month which of course is a riskier method of investing but also can be equally more lucrative if everything goes to plan in the shortest timeframe. I think that is what is really the difference between your system and the rest. You are more conservative and not an incorrect way of doing things, just cautious and to be commended anyway because if current holders are lucky to buy more shares at a` lower price and without competing against you and the results don't turn out to be a disaster then they will have made a greater percentage gain for taking the higher risk but you will get in at a higher price maybe for being more cautious. On other hand if figures turn out to be very poor then you will be able to wait longer for a good result and saved more as the sp might drop substantially as some unhappy holders might sell out pushing price lower. There is no right or wrong method of buying shares and its the timing and lack of day to day business news which makes it all so risky imo.

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Yes all good points, I also keep these in mind when looking at long term investments.

- Stock price is never to high to invest in if the timing is right.
- Stocks can always go a lot lower than you could ever imagine.
- Never be the first to buy if you think a particular stock has hit bottom, wait for new upward trend to be established.

Also on long term investments one of the worst things you can do is watch daily price fluctuations of the stock, at most look at it on a weekly or even just monthly basis.

Kat.

NEA Price at posting: 49.0¢ Sentiment: None Disclosure: Not Held
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0 Great analysis

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