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Six Prime Investing  

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  • Hedging Strategies For This Volatile Market [View article]
    Your last strategy, long AAPL short awful tech is very interesting. Maybe add MSFT to the long this as well. Shorting NOK RIMM HPQ sounds solid. Only problem is MSFT and AAPL are prone to market drops just like the rest. This hedge may be best in a neutral market.
    Jun 19, 2012. 11:40 AM | Likes Like |Link to Comment
  • Short TVIX: The Ultimate VIX Contango Trade [View article]
    I can't tell you how many times I've wanted to short the TVIX, but I always tell myself it's just not my game. However, there have been so many opportunities to make money doing it and I don't see any reason why that would stop now.
    Jun 19, 2012. 09:16 AM | 1 Like Like |Link to Comment
  • S&P 500 Sector Performance Over Key Recent Time Frames [View article]
    Excellent article Jaimini. I have been increasing focus on these sector ETFs and this is very helpful info. Thanks.
    Jun 18, 2012. 04:55 PM | Likes Like |Link to Comment
  • Set Yourself Up To Let Compounding Work Its Magic [View article]
    I agree with CVX being the better play over XOM, but I would be skeptical before proposing to google. Internet companies are flimsy and I cannot say with a high degree of certainty that google will be the best search engine in the world 20 years from now given how rapidly technologies change. I might have a fling with it though in the meantime.
    Jun 18, 2012. 04:51 PM | 3 Likes Like |Link to Comment
  • The Benefits Of Averaging Down [View article]
    Selling puts is also a good strategy when used correctly. I find it is hard to get good premiums when playing big companies, but if you find them go for it.
    Jun 16, 2012. 03:44 PM | Likes Like |Link to Comment
  • The Benefits Of Averaging Down [View article]
    Thanks pollyserial. You nailed exactly what I was trying to get across.
    Jun 16, 2012. 12:06 AM | Likes Like |Link to Comment
  • The Benefits Of Averaging Down [View article]
    Thanks Decoder, I had no idea I would spark this debate when I wrote the article. I assumed that most income investors practice it to some degree. And yes, just like everything in life there are no absolutes. Occasionally it is right to buy full and that is okay. Averaging down is just one of my important tools that I use for income investing.
    Jun 15, 2012. 09:07 PM | 1 Like Like |Link to Comment
  • The Benefits Of Averaging Down [View article]
    Moon Kil Woong, thanks for the reply. I agree and often my lower positions are not filled. This is one of the drawbacks that I take willingly for overall strategy. And yes, averaging down on a value trap hurts, but it doesn't hurt as much as buying a full position at the top.
    Jun 15, 2012. 09:04 PM | 1 Like Like |Link to Comment
  • The Benefits Of Averaging Down [View article]
    Douglas, the most important thing is that the stocks I buy are intended for periods of at least 5-10 years, and most often I have no intention to sell them ever unless something drastically changes with the company. For trades, I completely agree that averaging down is usually a mistake and you must have stops (sometimes even 8% is too much). For the companies that I average down my only exit point is if I get stuck in a value trap (HPQ). Then I bite my lip and take the losses, but not as much had I bought it all at once. There is no set percentage, I monitor my stocks closely and make a judgement call when I have to. As an example bought a small position of T several years ago at 32. Last summer I saw an opportunity to buy it at 28 so I did, giving me an average cost of around 29.50. If it drops back to 27-28 I may buy more, depending if I want my portfolio to be heavier in telecom. I have no intention of selling T within the next 10 years. I like buying small positions, or markers that keep me watching the stock with the intention of buying more at a lower price.
    Jun 15, 2012. 09:00 PM | 1 Like Like |Link to Comment
  • The Benefits Of Averaging Down [View article]
    I am not offended, it is just good manners. I have averaged down on JNJ, T, PG, WMT and PAYX to name a few. While not all of them have had significant capital gains, the dividends I have received from them over the years are an additional bonus. Many have had capital gains (T, WMT, PAYX). However, I do agree with you that averaging up is also appropriate in many cases. If a company goes up along with its fundamentals it is certainly acceptable to increase your position if you believe the value is there.
    Jun 15, 2012. 12:51 PM | Likes Like |Link to Comment
  • The Benefits Of Averaging Down [View article]
    Steve I really like your comment and congrats on your insight to sell in March. I can sleep much better at night knowing I am not being impulsive and that I have a game plan.
    Jun 15, 2012. 08:59 AM | Likes Like |Link to Comment
  • The Benefit Of Patience For Income Investors [View article]
    conkjc as the world gets faster and everything revolves around instant gratification, its going to be harder for more people to sit tight and wait patiently for their money to come in. Most people would rather trade S&P futures with the hope of retiring in two years (most of them go bust within a few months). I just hope people go back to their roots and understand what the market was originally intended for, dividends. Otherwise we may be doomed to a long drawn out traders market.
    Jun 15, 2012. 08:56 AM | 1 Like Like |Link to Comment
  • The Benefits Of Averaging Down [View article]
    Thanks for the reply marty. You are thinking in black and white terms. No one can know anything for sure. This is the best way to average risks with return. When I set three different levels to average down, I do believe that there is a significant chance only one or two will be filled. If that is the case I want to make some profit instead of never getting filled at all. The whole point of this method is to avoid the black and white concept of all in or none.
    Jun 15, 2012. 08:46 AM | Likes Like |Link to Comment
  • General Mills Versus Kellogg: Finding The Breakfast Producer Of Champions [View article]
    Thanks goldenretiree. I will be interesting, although I believe it will be positive as Pringles is a good business. It came at a pricy cost though and we will see if Kellogg has the muscle for it.
    Jun 15, 2012. 01:22 AM | 1 Like Like |Link to Comment
  • The Benefits Of Averaging Down [View article]
    Thank you all for your replies. I always welcome dissenting opinions when they are presented in a polite manner. Being rude is certainly a way to lose credibility. Averaging down works well for me and I will continue to do it.
    Jun 15, 2012. 01:21 AM | 2 Likes Like |Link to Comment