Forum Archive Index - October 2001

[Phaedrus <Phaedrus@techemail.com>]

  I was unable to resist taking a look at the chart of this "unnoticed" US 
stock (BNBN) that "has had a 37% rise in the past few days," and "has the 
potential to make one a millionaire."
  What I found was a really good illustration of the advantages of using a 
Logarithmic price scale when price movements are large. As you can see, it was 
not possible to draw a meaningful trendline using a linear price scale. With a 
Log scale, there is an unbroken confirmed downward trendline that has run for 
two years - so far. 
  Any unfortunate investor buying this stock as an IPO would have approximately 
$39.60 left for each $1000 they put in. So much for "Buy and Hold".
  Anyone buying more to "average down" would have been throwing good money 
after bad, all the way down, losing even more than simply holding. Don't do it. 
  Get out just as soon as it is obvious that you have made a mistake.
           Phaedrus.
  

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