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To average or not to average?

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The Real Shaft		#21 Posted : Friday, May 21, 2010 9:24:50 AM
Rank: Veteran Joined: 11/19/2008 Posts: 839		wondergirl, i couldn't grow trees in wazua... BTW,... how's our investment company doing...??? I'm the real Massey Fergu...... Shut your mouth....*
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Wondergirl		#22 Posted : Friday, May 21, 2010 9:32:18 AM
Rank: Member Joined: 9/12/2009 Posts: 312		Very funny, I also would want to grow my very own forest in the near future. Good for our enviroment and grandchildren. No, I'm not in any investment company at least not yet. This wonderful girl invests man-solo...
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The Real Shaft		#23 Posted : Friday, May 21, 2010 9:40:10 AM
Rank: Veteran Joined: 11/19/2008 Posts: 839		if you were in an investment caucus.... you might be exposed to a lot more info... like wazua..... with friends... over a pint... a pot of hot choco... and some mbuzi will be dispatched.... man-or-woman-solo.... it gets too cold... alone.... I'm the real Massey Fergu...... Shut your mouth....
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Wondergirl		#24 Posted : Friday, May 21, 2010 9:50:00 AM
Rank: Member Joined: 9/12/2009 Posts: 312		Well said. Like I said before not...yet. So the option is open, once I get like minded people. I'm hungary off for a bite...
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sheep		#25 Posted : Friday, May 21, 2010 9:51:07 AM
Rank: Veteran Joined: 7/24/2008 Posts: 781		Where did jammo go? He was the dude who popularized averaging losses in good ol SK,apparently he went MIA when things got really thick. The utimate goal of investing is to buy low sell high;if we re-write this core equation in psychology terms it becomes buy fear sell greed.
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The Real Shaft		#26 Posted : Friday, May 21, 2010 9:55:46 AM
Rank: Veteran Joined: 11/19/2008 Posts: 839		look at Paul Ndungu... did it with the support... of those who felt him... small strokes fell great oaks... and how better that to do it... over a laugh... when you have a loose 10k... tell me.. I will come with mine... I'm the real Massey Fergu...... Shut your mouth....
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MaichBlack		#27 Posted : Friday, May 21, 2010 10:14:44 AM
Rank: Elder Joined: 7/22/2009 Posts: 7,460		Wondergirl wrote: 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??? @Wondergirl - You clearly have no faith in Kenya-Re. Why would you want to buy some more shares? Is there a better counter you can put your money in, where you have more hope than Kenya-Re? Take your money there. If you make a profit of 100,000/= and a loss of 20,000/= on Kenya-Re then you still have +80,000/=. By the way, I also bought Kenya-Re (thanks to @guru and other analyst - herd mentality once in a while ) and I'm neither planning to average down nor jump ship - not yet at least. I'll take my (current investing) money elsewhere while at the same time hoping the bull market will push the price back to my buying price at which point I decide if I'll bail - Or I might be holding the stock a bit longer than I'd want to. Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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the deal		#28 Posted : Friday, May 21, 2010 10:15:43 AM
Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery		@ real shaft....ur poetry /lyrics makes me laugh..hehehehe...r u the new jammo...well jammos time ran out...a breed of old and new wazuarians have taken over...old(vvs,guru,GG,mukiha a.k.a mr cfc,MB,fundaa)...new(the deal,sparkly,sheep,wathaika)...etc..the reason why investors end up into thick mud is taking long to cut their losses until they cant sell anymore...thats when guys talk of cost average...i.e what if u averaged on uchumi in 2006...where could u be by now???
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The Real Shaft		#29 Posted : Friday, May 21, 2010 10:28:25 AM
Rank: Veteran Joined: 11/19/2008 Posts: 839		the deal,... the issue about speculation..... is that... it is speculation... hakuna formula..... today we are smiling.... tomorrow we are trying to hang ourselves.... remember KQ...??? it plummeted to Kshs. 3.00 anyone who bought at Kshs 3.00.... and later sold at Kshs. 127.00... is clearly going to buy the next share.. that falls to Kshs 5.00... and no... am not jammo.... just a lost poet looking for an escape.... I'm the real Massey Fergu...... Shut your mouth....
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VituVingiSana		#30 Posted : Friday, May 21, 2010 10:38:37 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,121 Location: Nairobi		MaichBlack wrote: @ Winston - You don't average down (or up for that matter) just for the sake. You look at fundamentals. What's the true worth of the stock/company? Then you make a decision. For example, I'd buy KK at 100/= because I think it is worth it. If the price drops to 90/= and I have the money you bet I'll "average down". When it hits 80/=, 70/=... I'll repeat the same process so long as what made me buy at 100/= in the first place has not changed. It will be a discount to me. At the same time, I might have bought AK at 20/= and bail at 18/= because at that point I might have new information which might suggest an AK share is actually worth 14/=! The opposite also applies. If I buy a stock at 10/= knowing that it is actually worth 50/=, I'll buy it again at 15/=, 20/=, 25/=,... depending on my cash flow - Otherwise I would have bought as much as I can at 10/=. Whatever you do, don't buy a rotten mango at 50/= just because you had bought another one at 100/= are you are trying to "average down"! Na kwa hayo machache.... Very well put... I have little to say! Great explanation esp using the mangoes as an example! Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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winston		#31 Posted : Friday, May 21, 2010 12:56:34 PM
Rank: Member Joined: 4/14/2010 Posts: 806 Location: Nairobi		Its been an education - many thanks.
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Gatheuzi		#32 Posted : Saturday, May 22, 2010 4:54:24 PM
Rank: Veteran Joined: 8/16/2009 Posts: 994		@ MaichBlack, You summarized it so well. Money has an opportunity cost. If say u can get 30% from a new investment, it is prudent to sell a loosing one and push for the gains. BTW on Kenya-re I only have 6 shares & geuss what!-they are in 2 differnt CDS accounts!! The only gains for me is reciving 2 sets of printed annual accounts, get 2 EFT,s of about 1 bob each and if I was a Chami like investor get the opportunity to get 2 boxes of Lunch!!! Its a shame CMA has not come up with a way of enabling investors get rid of these odd slots. Time is money, so money is time. Money saved is time gained in reverse! Money stores your life’s energy. You expend your energy, get paid money, and store that money for a future purchase made in a currency.
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Scubidu		#33 Posted : Monday, May 24, 2010 7:16:44 AM
Rank: Veteran Joined: 9/4/2009 Posts: 700 Location: Nairobi		How would averaging down work in a Dividend Reinvestment Plan (DRIP)? Say you know that Safaricom needs to buy shares using your dividend cheque (a DRIP). I'm sure they'll buy shares at a (market) discount as it is, not from market issued shares but from Treasury stock, but should they average down further as a matter of policy to add greater value? Are the purchases in the DRIP at the discretion of the investor, where they can make the decision to average down? We are investing earned income to make compounded returns, so this is not new capital, an already sunk cost. Does this strategy then make sense? “We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
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