Gijima-What a hiding

[platsak]

Is the news really so bad to warrant this price? Is it a possible entry position?

[john_1]

Platsak please explain to me why when a company is getting smashed do you think buy. This logic comes up all the time but I am not sure why please explain what your thinking is.

[platsak]

Shares been dropping after publication of a article in the Sunday times. Im interested to know if someone has any usefull information out there, and or if its weak hands selling the news. If the latter is the case it might be a good oppotunity to get in as the market will problably correct after it has digested all the news and the window of opportunity will close soon (or not and it may fall even further). I know this type of thinking doesnt fit into your trading style but for a few pirates out there it could be a opportunity or at least its worth looking at.

[john_1]

Sure, its not my thing but I do like to come to grips with the thinking of other trading styles. How do you manage this risk in this kind of trade?

[platsak]

John. In this case not much as a stoploss will problably trigger with the volatility now or with the closing of the futures contracts later in June. If it drops in the short term will problably do the pray and hold routine.

[john_1]

Ah! Hold and pray is definitly not my thing.

[louisg]

When a great business with good economic prospects is available at a fair price it is probably a good time to buy a share in the business. When the same great business with good economic prospects is available at a fairer price it is probably a great time to increase your share in the business. When the same great business with good economic prospects is available at an even fairer price it is probably a fantastic time to increase your share in the business even more. Makes sense to me, as long as its prospects have not changed, only the price. "Price is what you pay, value is what you get." - Warren Buffet

[john_1]

If this stratergy works why have some of the markets best blow up stories employed this tactic.

[louisg]

Because they were not great businesses with good economic prospects available at a fair price.

[john_1]

or the investors did not employ rule number 1 always protect your capital.

[louisg]

Rule Number One: Never lose money. Rule Number Two: Never forget Rule Number One. - Warren Buffet

[john_1]

Exactly! So protecting capital is the single most NB in active finacial managment. I can see the point of buying at a discount. We all can. What I cant see is if your system requires you to employ more capital when the market is going against you (short term at best terminally so at worst) how do you know when you are wrong and what do you do about it. That is what Brazen and I are saying. Its not a question of value its a question of capital protection and money managment. If you can tell me how you do that in this buying cheaper story them you have my ear.

[louisg]

You don't have to buy more shares. You protect you money by buying great business with good economic prospects at a fair price. Thats how you manage your money.

[#14]

Are they not still under further cautionary.