Done (& thanks for the prompt):
http://www.sharetrader.co.nz/showthr...itional-orders
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Done (& thanks for the prompt):
http://www.sharetrader.co.nz/showthr...itional-orders
Agree with your sentiments SF. I have historically added to some positions even though they would no doubt be categorised as being in a downtrend. This has paid excellent rewards provided one is patient and that is the key - patience.
I am sure that there are a large number of ST contributors who have bought during the recent weakness in the markets even though stocks may have been in a down trend. Provided one is patient IMHO we should well rewarded in the coming months.
Gaz
Thanks for the reminder from the great Mr P. A sad day when he stopped posting to Sharetrader.
90% of the people make the same mistakes and say to themselves "next time i will do differently", however, they will buy the downtrend or average their price again and again.
The main reason I have stayed out of SKT all this time
My charts show that SKT is currently in an uptrend:
It began on 5-Aug-20, though obviously we would not have known this at the time;
The long downtrend ended on 6-Oct-20 by my criteria;
Today close confirmed this is indeed an uptrend with a close of 16.8c exceeding the 16.6c of 9-Sep-20.
So I pose the question to all, when do you decide that the downtrend is over and thus the stock is buy-able?
Trend investing is something that applies if you invest in sync with the trends, are prepared to watch the market and change your position when the trend ends. It doesn't always follow that someone buying in an uptrend is the wise one and the person selling to them is a fool. Different investors can have different time horizons, so both buyer and seller can be 'right' depending on their time horizons. If your time horizon is greater than a particular share typically holds its trend through the business cycle, then it doesn't really matter what the share price trend is when you buy. All that matters is that you buy low. For someone like me, I like to do my own valuation before I buy. That means I often buy in a downtrend. Because if my valuation is too high, I have to wait until the price comes down into my buy range, and that means I have to wait for the price to drop. If I get it 'wrong' and the share price goes lower I don't mind, because I usually buy on some kind of projected yield multiple. If someone buys lower and gets an even better yield multiple than me then good on them. I don't worry about that as my own objective of buying at a certain yield point has been satisfied, and I have avoided 'missing out' if under the alternative future the share price had turned and gone the other way. I don't have to buy right at the bottom for my investment strategy to work. I should add trend investors never buy right at the bottom and that doesn't seem to harm their strategy either.
If I do get it wrong (in the eyes of some), then my 'penalty' is often continuing to rake in dividends until the share price comes back up to my buy price. This is no real hardship, and often a better option than leaving that money in the bank.
In deciding when not to buy a company, I am very cognisant of a company's debt position. By using different indicators like this in combination with downtrends, you can usually tell whether a share price slippage is normal business cycle behaviour or a death dive, and so reduce your 'buying in a downtrend' risk this way.
Each to their own as far as buying in downtrends goes I guess. But to have a simple 'never buy in a downtrend' mantra means you are a TA bigot who is unable to accept that other ways of strategic investing are possible.
SNOOPY