Forum Archive Index - October 2000

[Jefley Aitken <jefley@xtra.co.nz>]

hello chatters
last week i responded to a rumour X-nth (from someone's uncle's chum on a 
golf course, i think) with regard to cah taking a swoop on ffs -- generally 
agreed as being a non-issue.

however, i also mentioned averaging down, and moose and grant keymer 
responded with warnings.

but it seems that if the market is dropping because of the time of year, 
oil prices, dollar exchange or whatever, AND if an existing portfolio entry 
still has all the same (good) indicators that made you buy it in the first 
place, THEN averaging down is an opportunity -- not a case of throwing good 
money after bad.

i bought some ffs at 70c at the beginning of the year.  since then have 
rearranged my ideas on its management, but the trees are still growing.

heaps of trades are going through so presumably some people figure that 
shares at 35c + 2 x rights @ 50c = 28.33c shares is a good deal ...   by 
taking up the rights without averaging down, i'll have a unit cost of 40c. 
 by buying an equal number at 35c and then taking up the rights, the new 
unit will be 34c.

are there "rules of thumb" -- or even classic guidelines -- that help with 
this sort of decision.  i don't mind holding for a couple of years, 
although the lack of a dividend is not attractive ....

i'm currently going through similar struggles with airva and tel.  at least 
tel is not complicating the picture with carrots of any kind (apparently 
the central otago bunnies are starting to turn up their noses at carroty 
offerings from the local farmers -- is this a recognised economic 
indicator?).

i'd really appreciate help, and thank you grant and moose for the last lot.
regards, jefley

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