Investing Strategy This has been a nice little run. Althought I am happy to see that last of the sub $7 numbers, I am still well underwater. Just updated my numbers yestersday and my average purchase price is in the high teens - so I still have a ways to go.
I concur with someone's earlier comments that $18-20 would be fair value for this company - at this time. I expect we will get there in due course - it could be quick or a bumpy ride. Who knows, surely not me.
That brings me to a question of strategy. After watching the price fall from the $30's to around $20, I thought it was a solid buy at those levels and I picked up a meaninful postion around ~20. As it fell into the teens, I picked up more - it fell further and I picked up even more around $12 and $13 - thought that was a great buy...but as many of us know, it just kept on falling. By that point, I was way overexposed and my confidence in managemenet was shacken and my own judgement - quite frankly..
In hindsight, I think an alternative strategy would have been to hold a core position and a non-core position (the stock I bought in the teens), but one has to keep in mind that the stock could really correct significantly to the downside. The problem is who really knows when that will happen.
A potential strategy could have been to hold that core position and be very disciplined about setting stop losses on the non-core position and not buy back in until the stock had stopped falling or started to turn.. If I did, I could have stopped out on my non-core position around 10-15 % below my purchase price. I could have still held a core positon if the stock recovered quicker. In this case, and with the benefit of hindsight, it would have been nice to have been in a stronger position to capitalize on the stock when it was in the $6-10 range and not be seriously overexposed in my portfolio. In the end, I did add a little around $9 -10 but was getting very uncomfortable with how much I was holding.
Welcome others thougts.
John