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Author: nichola4 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 36682  
Subject: Re: Averaging Date: 7/20/2001 12:54 PM
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Janny,

<<I don't think, that after doing your DD, you will volontarily choose a "loser"!! So if the initial entry is wrong, it is normally due to market situations and not in choosing the wrong stock!>>

The market doesn't care about our DD. It doesn't care at what price we purchased it and it doesn't know. It doesn't care if we are at a profit or loss. If the initial entry is wrong it is because we made an error. The market is always right and we cannot fight it. We need to accept the fact that we made a mistake and not rationalize or make excuses for why we are now at a loss. Our egos cannot get in the way and we certaninly cannot say that we will eventually be proven correct.

There isn't anything wrong about having a position go against us. Even the pros are wrong 40-50% of the time. The difference between them and newbies is that they cut their losses realizing this is the way the market works, and the average amount they make on their winners exceeds the average amount they lose on their losers. Taking losses is mechanical, part of the game, and nothing personal.

<<I don't see, why you shouldn't try to get a better entry point>>

You are assuming the stock will rise. One does not know this will occur and if the initial entry is at a loss obviously a mistake was made.

nic




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