PharmBoy

DryShips: Poised to Rally

Mark, my average price being what it is, is due to me buying 100 shares to start, then only 50 at each of the lower price levels. I didn't buy equal position sizes each time. That being said, hindsight is 20-20. Who could have known that DRYS would storm back so hard, so fast. They say not to average down on your losers, so I kind of took the middle ground. Buy some more, but don't bet the house on it. That being said, if you were smart enough to back up on the truck at 3 and change, nice one!!




On Jan 06 02:41 AM Mark Anthony wrote:

> PharmBoy:
>
> I don't understand! Based on your description where you entered DRYS
> you should not have an average DRYS price as high as $25. Actually
> you should be makign money by now. You first bought at $70, and then
> at $14, and then at $5. Suppose you spend $10K at each price level,
> you would have bought 143 + 714 + 2000 = 2857 shares for a total
> cost of $30K, or average cost of $10.50, and you should have a comfortable
> 32% profit at today's close price of $13.85.
>
> Your investment strategy must have a problem. You should view the
> lower price as a big buying opportuity, not as opportunity to lose
> money. When DRYS was at $3.05, you had an opportunity to buy way
> much more shares that you could have bought when it was at $116 a
> share.
>

DryShips: Poised to Rally

I bought DRYS when it retraced to the mid 70's and thought I was getting a good deal at the time! I then doubled my holdings by purchasing more at $14 and finally $5. My average price is now around $25/share (excluding Aug and Oct dividend payments of 20 cents/share).

At today's price, I don't want to lock in a loss by selling ATM calls for $2 and OTM calls for mere pennies and then have the shares called away later this month. Additionally, there doesn't appear to be any substantial overhead resistance until around the $25 mark (Sean, you called it at $18...?), which appears to be marked by a double top on Oct 13th and 20th, and a weaker 3rd peak on Nov 4th which begat the slide to 3-ish.

On the other hand, they say you should sell into strength, and this rally has had legs for over a month now (though this leg's volume is markedly lower than the first leg's, not to mention a severely overbought scenario on the RSI). My dilemma boils down to this (with a nod to Kenny Rogers): should I hold 'em or fold 'em? Any comments welcome.