Do you know how to average down? Ever given averaging down some serious thought? Cramer says that you should average down in 4 buys. Is that right? How about 10 times? What about twice? Which is better? I hate when people say, oh 4 times is a good number because somebody said it was. So let’s explore the dynamics behind averaging down and how purchase count affects the overall share price.
Yes I know prices for commodities are up, and yes there is growing demand. Yes the bakers are going to demand things from their government. But in the face of all this I don’t buy the commodity rally. Here’s why.
Yes folks you read that right I have become a bull, but in bear’s clothing mind you. On May 18, I became a Bear in Bull’s Clothing. On July 13, 2007 I said that the market had reached its high water mark. And on December 3, 2007 I became a bear. I am very optimistic, even though I should not be. I am looking at my portfolio and right now I am staring at 0.35% returns since the beginning of this year. Until the beginning of this week my returns were around 6.8%. This week I was completely walloped. But I am completely optimistic, because after seeing this week I feel like singing Pat Benetar’s “Hit Me With Your Best Shot!”
I like GPS, even wrote a block entry about it. So the question is why did the share value drop faster than gravity on Jupiter? Answer is that it baffles even the CEO of the TomTom.
You need to listen to the following video, and listen to the following words: Tech is Poison, and Short Nokia, and Short Garmin. GPS business is done.
Disclosure: I hold positions in Credit Suisse, and am extremely bullish.
I like Credit Suisse because unlike its competitors they have stayed away from much of the sub-prime crisis. Though I am worried about what Credit Suisse has just announced.
Credit Suisse has written $2.85 billion off the value of its asset-backed investments and found mismarking and pricing errors on its books, it revealed on Tuesday, sending its shares plummeting.
Tim Sykes has this habit of making fun of value investors (2).
So, value investors, listen up; you’re all a bunch of little sissy girls! You’ve become spoiled with the assets you manage, your mainstream credibility and the money you earn. I respect your strategy, but understand this:
I’m comin’ for you
This train wreck is going to be interesting. Jerry just sent out the following email. Here is part of what he says.
we believe microsoft’s proposal substantially undervalues yahoo!—including our highly recognizable global brand, large worldwide audience, significant recent investments in advertising platforms, future growth prospects, our ability to generate free cash flow and our earnings potential as well as substantial unconsolidated investments (like alibaba and yahoo! japan).
Well it looks like Yahoo is talking to AOL.
It is understood that Yahoo! and its team of advisers from Goldman Sachs and Lehman Brothers, the US investment banks, have spent the past week evaluating possible tie-ups with media and technology firms that would save it from being swallowed by Microsoft.
It is also understood that one option being explored is to restart merger talks with AOL, the online business owned by Time Warner.
You have got to be kidding me. Is Microsoft that bad? According to the attitudes of Yahoo it seems to be. It is this sort of thinking that has me very pessimistic on Yahoo. When personal decisions get in the way of business decisions then you know something is very wrong.
Jason brought up a good point:
BTW, those Fast Money guys don’t seem as concerned about disclosing their positions or trading under altered rules like Jim Cramer is.
I wonder why that is.
It’s tough though. If you disclose, your trying to pump/dump stocks. If you don’t, you’re hiding stuff.
I think the reason why the Fast Money people don’t mention all of their holdings is because they are traders/investors. It’s like Buffett where he only mentions things after they have occurred.
