Rank: Elder Joined: 6/23/2009 Posts: 13,516 Location: nairobi
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Angelica _ann wrote:sparkly wrote:obiero wrote:sparkly wrote:NewMoney wrote:deadpoet wrote:mulla wrote:Angelica _ann wrote:Never average down on a share with poor fundamentals, lessons from KQ and MSC. Never ever. You are better off selling and going for shares with strong fundamentals - dont dig a hole you cannot fill.
Today if you sold the KPLC shares and bought into KCB/Safaricom or I&M/NCBA, am sure in 2 years you will be better of than you are now.
I learnt that lesson of averaging down the hard way with KQ and in business. If you find yourself in a bad investment with dim future prospects, BAIL OUT. Dust yourself, swallow your pride and look for better investments. You will save yourself a lot of time and money in future. Also do the math first. How much do you have to commit to average down to the current price? My little math background tells me that it's not mathematically possible to average down to the current price, unless you 1) buy an infinite extra amount of that share or 2) are expecting the price to go up e.g your ABP is 20, current price is 10, buy extra to average down to 15 and hope price will go up to 15 My little math background tells me the same thing. The average of two numbers will always be somewhere between the higher number and the lower number. It can't equal the higher or the lower number. In shilling terms, KES 10 and KES 20 per share are totally different propositions especially when holding large amount of stock. Averaging down can be done but with high caution No need for caution when averaging down a fundamentally good stock. BAT  COOP
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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