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Alterra Power MGMXD

Alterra Power Corp is a renewable energy company. It is primarily focused on development, construction, and operation of renewable power projects. The company's business has four major segments - Construction and Development, Geothermal, Hydro, Wind, and Solar.


OTCPK:MGMXD - Post by User

Post by BoldForbeson Aug 05, 2016 2:46pm
162 Views
Post# 25115030

The Power Of Averaging Down

The Power Of Averaging DownThere is a power of averaging down in which you can actually make a significant return with the stock only reaching the initial price you purchased it at.

Of course, many individuals chase "bad" investments (chasing bankrupted companies) and double down on incorrect choices or do not have the patience which is required for the math to work. 

If you do believe you are on to something, you have the funds to take the risk (it will not keep you up at night and you will not be checking the ticker symbol every 5 minutes) and you have patience (may take months or years) averaging down might be a good strategy.

You need to check management, company strategy, industry, and several other factors.

In the examples below 1 has you never losing money and the 2nd the price only goes down until it goes back to the original amount.  Which provide a better return?

Investment Price Per Share Total Shares Per Purchase Cumulative Shares
 $       100.00  $                 10.00                                         10.000                          10.000
 $       100.00  $                 11.00                                           9.091                        19.0909
 $       100.00  $                 12.00                                           8.333                        27.4242
 $       100.00  $                 13.00                                           7.692                        35.1166
 $       100.00  $                 14.00                                           7.143                        42.2594
 $       100.00  $                 15.00                                           6.667                        48.9261
 $       100.00  $                 16.00                                           6.250                        55.1761
 $       100.00  $                 17.00                                           5.882                        61.0584
 $       100.00  $                 18.00                                           5.556                        66.6140
 $       100.00  $                 19.00                                           5.263                        71.8771
 $       100.00  $                 20.00                                           5.000                        76.8771
 $       100.00  $                 21.00                                           4.762                        81.6390
 $       100.00  $                 22.00                                           4.545                        86.1845
       
 $   1,300.00   Investment $  $                  1,896.06
       
       
Investment Price Per Share Total Shares Per Purchase Cumulative Shares
 $       100.00  $                 10.00                                         10.000                          10.000
 $       100.00  $                   9.00                                         11.111                        21.1111
 $       100.00  $                   8.00                                         12.500                        33.6111
 $       100.00  $                   7.00                                         14.286                        47.8968
 $       100.00  $                   6.00                                         16.667                        64.5635
 $       100.00  $                   5.00                                         20.000                        84.5635
 $       100.00  $                   4.00                                         25.000                      109.5635
 $       100.00  $                   5.00                                         20.000                      129.5635
 $       100.00  $                   6.00                                         16.667                      146.2302
 $       100.00  $                   7.00                                         14.286                      160.5159
 $       100.00  $                   8.00                                         12.500                      173.0159
 $       100.00  $                   9.00                                         11.111                      184.1270
 $       100.00  $                 10.00                                         10.000                      194.1270
       
 $   1,300.00   Investment $  $                  1,941.27


Mentally, most investors\individuals cannot handle the 2nd option, even though they make more in a return.

It is research, math and patience; not emotions.

Giddy up,

Bold Forbes
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