This is quote from Jesse Livermore - on averaging:

"I have warned against averaging losses. That is a most common practice. Great numbers of people will buy a stock, let us say at 50, and two or three days later if they can buy it at 47 they are seized with the urge to average down by buying another hundred shares, making a price of 48.5 on all. Having bought at 50 and being concerned over a three-point loss on a hundred shares, what rhyme or reason is there in adding another hundred shares and having the double worry when the price hits 44? At that point there would be a $600 loss on the first hundred shares and a $300 loss on the second shares. If one is to apply such an unsound principle, he should keep on averaging by buying two hundred shares at 44, then four hundred at 41, eight hundred at 38, sixteen hundred at 35, thirty-two hundred at 32, sixty-four hundred at 29 and so on. How many speculators could stand such pressure? So, at the risk of repetition and preaching, let me urge you to avoid averaging down".

Wazuans: Whats you take? Am kind of undecided.

Right now averaging up is what sounds ludacris,the market conditions have drastically changed.Buy at your own risk.

@ twenty twelve. that is v true. if u can see that it is a market misjudgement, then and only then can u average down

indeed

Why not 'average' with another counter eg Equity or SCOM? I thought the reasoning behind this theory is to take your investment out of the negative?

@wondergirl be very careful with kenya re and i wouldnt advise averaging down... the price has been falling drastically even when it is trading cum div with a fair dividend and this is clear evidence the market is losing faith in it....

i was a very big bull on this counter before the results but now i am the biggest bear because i dont see how they can improve profitability with the rate of climb in claims... and would advise selling before one gets caught in the trap called EX DIV

clear evidence can be seen with the price reaction of CFC and Kenya re after the release...

@the real shaft we know all about averaging down the argument is averaging down on a stock that continues falling afterwards...

IMHO before buying a counter one should know at exactly what loss he will begin to average down and exactly the amount...

eg i never average down until i've made a 35%+ loss on an investment

Thanks guys for your sentiments,
Truly said. @ Real Shaft I do know about averaging down, it has really worked for me before with Kenya Air, Safcom and I'm just about to take my profits with BBk after really averaging down. My beef is that it looks like Kenya re is a dyng horse!!! Should I hold it at 14.50 and be content with the ka-divided, should I sell before it becomes ex-divinded and make a loss of more than 20k or should I buy a few at lets sat 12.00 and then pray that it moves up a bit and just do with getting back my investment???

pole my bad...

misread your enquiry....

Kenya Re...

before we look at the individual stock..

let us examine the market of re-insurance....

with Zep-Re...

East African Re-insurance....

and the grander insurance business...

there is nothing but hope .....

Kenya-Re..

is re-structuring...

human resource-wise.....

meaning the tide of bad-decisions..

may be reaching the twilight....

further..

in the sector...

who else would be of interest...???

in may humble estimates...

Kenya-Re..

is close to KCB....

will not increase value astronomically like KQ...

but sound enough not to plummet....

if you are really into that stock...

a small shiver...

will not worry you....

if you have 1,000 shares at 14/50 = 14,500/-...

buy 1,000 shares at 13/50 = 13,500/-

then but 5,000 shares at 6/- = 30,000/-

totaling 7,000 shares at 58,000/-

meaning 1 share = 8/30....

if the stock reaches 10/-....

you will be smiling....

Ahsante @ Real,sounds like you have mirrored what I wanted to here.@ Real
By the way had you taken a sabatical? Haven't seen you here for a while... someone missed you.