i doubt their biz can sustain if they no get ETP project

Q @ 0.2

i plan to sell @ 0.2

How much can one continue to average down?

In a bull run, some stocks could have a massive bear run! It's possible!

Buying and holding it long term could be extremely painful!!


Ok. Back to Amedia. You bought at 31 sen. Say you purhased 10,000 shares or rm 3100.00. ( For simplicity sake, I just don't count all the additional costs),

The stock is now 23 sen. Do you buy another 10,000 shares? Assume you do.

You now have 20,000 shares and your cost is 3100 + 2300 = 5400 and your cost per share is now 27 sen.

The stock is now 23 sen and you are still deep under cost. Do you hold? Or if Amedia drops to 20 sen, would you buy more? Yes, you need to address this. Ask yourself, if Amedia drops, would you buy more? And also, how much more are you willing to buy?

Of course, the share market is not mine and of course, it's possible that the Amedia does not drop to 20 sen. See? I am not a share market VoDoo-er and I have no idea how Amedia would trade in the future. But if I was in your shoes, I would address this issue. I need to ask myself, what if Amedia drops some more? Am I going to buy more? And how much longer can I repeat this?

Now say, the worse does happen. Amedia drops to 20 sen and your new averaged down cost is 27 sen. And you decide to buy more. Another 10,000 shares at 20 sen.

Your new cost = 3100 + 2300 + 2000 = 7400 and your cost of investment is 24.6 sen. And your 'paper' loss is 1400. (If you had not averaged down, the paper loss is 1100.00.)

And what if the shares continue to drop to 17 sen? Not possible? Let's address the 'what if' scenario. You buy more. Another 10,000 shares at 17 sen. Your new cost = 3100 + 2300 + 2000 + 1700 = 9100. And your average cost per share is 22.7. At 17 sen, the potential paper loss using this average down strategy = 2.3k. (If one had not averaged down, the paper loss is 1400).

Yeah, the losses magnified. (This is assuming Amedia continues to fall. And needless to say if Amedia recovers, one could even exit Amedia with a nice profit. )

Well, I hope you see my flawed way of thinking here. Warren Buffett used to say, when you find yourself in a hole, you should stop digging!!!

See investment or trading or punting mistakes can always happen. No one is perfect. Mistakes could always happen. Knowing when one is wrong is said to be the key for one success. If a mistake was made in the stock market, averaging down or buying more, means only one thing. One is only buying more of their mistake. Is this a wise strategy?

And averaging down cannot be repeated forever and ever. Why? There is a limit to one's financials! No one can continue to average down forever. Yes, there's a monetary limit on how much one can buy!

Ok but what Amedia itself?

Now if I minus out the current 'steep correction' and look at your 31 sen entry price. I would assume that you did not chase the stock and you bought the stock because Amedia hit a of 39 sen on a very impressive run and when the stock pulled back to 31 sen, perhaps there was a justification to take a punt on the stock. 'Buy on strong pullbacks' is a normal advice and many times it is known to work. But it's known to fail too.

With such a drastic pullback from an intraday high of 39 sen, my concern would be what if pullback is much stronger. And of course, now, present day, looking back now, it's much easier. The pullback is much stronger and some would be greatly concern. The stock had broke up from the 27 sen region but it has retraced much, much lower. It had couple of minor bounce but the pullback is strong. Very much strong.

What I be concern? What if this is a great pump and dump? Should I be asking this?

Next thing I would ask is why did the stock had such a great run recently? Was it based on pure fundamentals or did this stock enjoyed a great run along with other ACE penny stocks? (this is one issue you have to address yourself)

And that's all. Not much information. There's some small cash in its balance sheet and some small debts too. There's simply isn't enough financial data to determine the quality of the company.

How? So Amedia installs and operates a transit TV network on buses. It plans to expand other public transport systems such as the monorail, LRT and KTM. Now if one is looking at it from an investing perspective, one should ask, what's really the potential? How is their current content? How about taking a Rapid KL bus and observe the TV network operated by Amedia. Does it have potential?

How?

Can this ACE stock be listed in the main board next year?

I do not know but isn't it way too early to tell?

And then, perhaps one should address the issue of buying a stock just because it could be 'promoted' to the main board. Is this a wise decision? Or is this an unwise decision?

For me, whenever someone promotes such an idea (ie buy ABX cos ABX gonna be promoted to main board), I would usually check past data. Meaning to say, perhaps it's best to check out if this is a sure win strategy. Has there been proven success stories? And have there been some horror stories?

Me? I tend to remember horror stories! LOL! Stocks like GHL and Dreamgate (RGB) comes to mind. They were promoted from Mesdaq (now called ACE) to the mainboard and they have not done well at all.

So if you ask me, this is one huge assumption (buy a stock cos it will transfer to mainboard) for one to make. There's no guarantee a stock is worth a buy cos of such reasoning.

So how?

Could you determine if Amedia is an investment grade stock?

Yes, apparently the company has great plans to expand as per their statements in the local media but there's no proven track record to support this claim. As it is, the company have one quarterly earnings report. That's all. There's no historical data.

I understand that one should buy a stock based on its potential future prospects but one has to be realistic and one have to address if such plans can be achieved and the only one can do is to refer to some proven track record from the company. Or in layman's term, one needs to gauge if the company can deliver what it promises.

Now this issue is important cos there had been far too many companies making such claims on their future prospect but somehow, they fail to deliver what they promise.

How? Do you even like Amedia business prospects?

they are gone for good

this is what i call the effect of sheep flock

ppl buy u also buy

now see wat happen

i ask him but he say he dont u