Investing 102

[GregWeld]

Originally Posted by bdahlg68

I decided earlier to add some risk to my portfolio and picked up a small position in CYOU before the dividend. So far so good. I picked the shares up for $24.73 and they paid a $3.76 special dividend. Up about 11% after the dividend is paid. Still a risky affair as this is a China stock (always the fear of fakes) and the Chinese economy has been cooling. Therefore this is a small position more for fun and to see where they go with dividends.

I'm also now green on SAN! Took a lot of patience, and a good average down when the stock was around $5. I've now trimmed back that position so it is inline with the total value of many other stocks in my portfolio. I got a little heavier than I'd like to have been in SAN, but it worked out. But, this is not always the case.

Pretty happy overall with unrealized gains YTD - nearly 14%. Hoping for continued success rest of year and beyond.

Averaging down is a very good way to work out of a "problem" stock.... IF -- it's a stock you don't mind owning for awhile. I've done this zillions of times and most of the time it's worked out real well.

One time I averaged into a 93,000 share position that eventually cost me a $1.00 per share loss.... I was trying to save an $8,000 (total) paper loss in the position. That was extreme -- but was worth the loss for the education it provided!