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Author: eboller Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 36686  
Subject: Re: Averaging Date: 7/20/2001 1:18 PM
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As for averaging in DT'ing or STT'ing, I don't do it although what I do could be construed as averaging if one wanted to. Take LINK as an example. I had it at a significantly higher price than it is today and it dropped below my stop AH. I decided to hang on to it instead of letting myself be stopped out well below my stop-loss because I believe in the companies future, especially with the X-Box coming up as well as other deals they have. I stuck it in my LT port at that point.

How do you decide that it should be part of your LT portfolio at this point? I guess the fact that you believe in the future of the company is part of the reason. However, if that is the case wouldn't it make sense to just buy it as part of your LT right of the bat? Starting with an initial portion and accumulating shares as you say?

The thing I worry about is that someone who is trading might have a stock go past their stop--but then they automatically just put it in their LT and never use their stops. Why have a stop in the first place if it is a stock you want to hold long term? I guess I don't understand why someone would purchase a stock in a company that they really like for short term then somehow the mentality changes to long term. Why not just purchase it for long term?

Anyway, if it works good for someone I guess that is fine. I just don't really understand it--and as a general rule I'd advise against it. Especially for anyone who is new to the game. Keep long term as long term and short term as short term. Don't mix the two.

Eric
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