Monday, September 12, 2011

Do not average a loss

TraderbyBirth says
"Sir, I am a big fan of yours and follow you everyday.I have purchsed everonn @430 on August 29th and it touched a high 450+ the next day and the news of MD bribery case came out on Monday.I am unable to get out of this scrip.What should I do now? Its very painful to take the losses due to such scams.Can I average it at this level? Please suggest.Right now it is @443."

My Notes: Today's close for Everonn was 243 (not 443). See, when the market is punishing a stock for corporate governance issues, it is likely that the stock may remain out of favor for some time. Traders have to take their own decision on exiting the trades that they take. Exits are a very personal issue. We are in a bear market. Usually, it is wise to stay with blue chips, in conservative sectors like FMCG, Pharma, IT. In any case, please do not average a losing trade.

3 comments:

Pranali Khanolkar said...

Thank you very much Sir.

TraderByBirth said...

Yes,I have made it a habit to not average loss making scrips...but in such incidences nothing really works, that is why I wanted your take on it.Thank you for your support.I will hold it till I get a comfortable price to exit out of the scrip.

In Thought Process said...

I too have a position in Everonn, but not as a trader but as a investor.
Was doing SIP in the stock for the long term. What should i do now, continue with SIP or stop?