Of course you didn't mention that a couple of days after selling Knock Knock Plc a bid comes in and the share jumps 40% (ahem. There was an article about that on here earlier this year. Most shares go up and down its often just a question of when you get on for the ride. So top slice and then buy back on falls.įallen stars maybe worth looking at, I notice quite a few do recovery although it may take some time. I find averaging up when the share price dips is a better strategy, I have done this successfully on Bioventix (LON:BVXP) and Tristel (LON:TSTL), both rebounded and went up around 60% in a few months then I top sliced them. I agree averaging down is risky and I don't usually do it anymore. I don't usually average down more than once. Boohoo.Com (LON:BOO), ASOS (LON:ASC), Xaar (LON:XAR), Dialight (LON:DIA), Renishaw (LON:RSW), Solid State (LON:SOLI), and Electrocomponents (LON:ECM) have all fallen and then recovered.
#CLOUDTAG LSE 480P#
One that worked for me Staffline (LON:STAF) went down from 600p to 480p and then soon went up again and went up to over 1500p before falling back to around 800p. The shares are simply oversold. Ultimately, theįinancial losses suffered by the investor are far greater than might have been suffered … He/She thinks how foolish the rest of the market to miss this glaring opportunity. Initial satisfaction comes from the lower overall average purchase price. Share keeps on dropping down at intervals in large percentages often spread out over one, two or three weeks. The investor initially double downs at the lower level and often once more again doubles down at another new share price low for good measure. e.g Cloudtag plc or many small mineral and exploration stocks on AIM provide plenty of examples. The brief rise in the share price gives the investor one last chance to break even. The share price spikes up again within 48 hours temporarily, rather like a drowning man trying to catch the last gulp of air. The selling of these type of stocks is always difficult as we feel we deserve for the share to bounce up soon!Īn investor can sometimes get out lucky when a share price you own falls hard and fast. You catch the fall at a low point of the day with an additional purchase. You fill up with regretful remorse at each new lower level. The same investor after months of agonising eventually gives up. Share price from the moment you bought it always seems to find a lower level. The Knock Knock share price makes its way down to 40p. Let us use an imaginary company for illustration purposes. We all have our own set of excuses or scenarios. Question is generally not! It is not easy to give an unequivocal yes or no. "has averaging down worked out for you in the past?" This question came from a reply to a recent article.
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