Scott PearcyParticipantOctober 27, 2020 at 1:33 PMPost count: 391
I bought back into BEN at $22 after taking profits in the position earlier this year…..Do you still recommend holding out to $15 for the 3rd tranche….or 10% below the 2nd tranche? (I am pretty close to that now!)Sean HymanKeymasterOctober 27, 2020 at 1:37 PMPost count: 4658
Yes, in your case, either one of those averaging down scenarios is fine. Remember, the 10% distance is a minimum distance. In highly volatile times, you could always consider widening that out.Scott PearcyParticipantOctober 27, 2020 at 1:43 PMPost count: 391
Limit order placed to purchase my 3rd tranche at $18!! Take the emotion and guesswork out of it!Sean HymanKeymasterOctober 27, 2020 at 2:03 PMPost count: 4658Daren BrumleyParticipantOctober 27, 2020 at 4:25 PMPost count: 26
Was today’s almost 14% price drop an overreaction to the earnings miss, or are BEN’s fundamentals actually declining? I have an average price of $21.20, so I am only down about 7%. My plan was to wait for the 3rd tranche at 15ish.
DarenSean HymanKeymasterOctober 27, 2020 at 4:43 PMPost count: 4658
Nope, their fundamentals are great and even improving overall with their latest acquisition of Legg Mason.
$11.5 billion company with 8.71 forward P/E. $1.36 billion in earnings. $6.36 billion in cash. Just shy of a billion in debt (so, low debt relative to their size). 4.73% dividend yield. Solid company. Cheap company. But that doesn’t keep overreactions from happen. If the market was always rational, there would be no true value opportunities.
Emotional investors and algo trading exaggerates things.
You’ve got to remember that it also went from the $14’s to almost $24 within mere months. So, we know its volatile and so we should expect that.
It’s always been volatile. So why should we expect that to change just because we’re in it? We shouldn’t. Volatility and down-moves are our friends. They allow us to get in averaging downs if we’ve missed any opportunities, and thus lower our average breakeven prices. Where did I get that thinking? Warren Buffett: https://logicalinvestor.net/forums/topic/my-thoughts-on-the-market/page/19/#post-34717sshettyParticipantOctober 28, 2020 at 9:33 AMPost count: 113
I am also at a price point of $22 waiting for it fall below 18 to put my 2nd averagingSean HymanKeymasterOctober 28, 2020 at 10:00 AMPost count: 4658
It could get there over the coming hours to days.
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