Averaging Stock

mohan1975 · #1 18th September 2008, 05:12 PM

Dear Speculators

Done investment in a stock and that went down around 50% Now I want to average the stock. Does anyone have sample excel for forcasting the number of stock and which level to be enter.

Thanks in advance for any help.

Regards,
Mohan1975

fast_rizwaan · #2 18th September 2008, 08:55 PM

Quote:

Originally Posted by mohan1975

Dear Speculators

Done investment in a stock and that went down around 50% Now I want to average the stock. Does anyone have sample excel for forcasting the number of stock and which level to be enter.

Thanks in advance for any help.

Regards,
Mohan1975

hi Mohan,

A. forecasting the number of stocks - how many stocks to be bought!
B. which level to enter - what price/percentage difference (50% or more) should be there to average existing holding? or are you asking "which nifty/sensex index level for buying?"

you need to answer the above, as your requirement is "unclear" with when to average and how much to purchase.

btw, buying 2 stocks for every 1 holding will bring average price very close to current price.

mohan1975 · #3 18th September 2008, 09:40 PM

Hi ,

Thanks for the help.

I have attached a sample excel file. May be that could help you that what I am asking.

I know this is very simple question

Regards,
Mohan1975

madhava36 · #4 19th September 2008, 12:47 AM

You are now holding 1400 shares @ Total cost of Rs.96165.875.The average cost is 96165.875/1400=Rs. 68.68991.Please note that Brokerage for selling is not taken into a/c.

madhava36

yeshwantr · #5 19th September 2008, 01:04 AM

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fast_rizwaan · #6 19th September 2008, 04:05 AM

You just need the formula to average a list of shares:

let's try averaging 4 times a share:

1. 10@100
2. 20@90
3. 15@80
4. 12@70

here's the way:

1. calculate the total amount for all the shares:

total amount = (10*100)+(20*90)+(15*80)+(12*70)

2. calculate total shares

total shares = 10+20+15+12

3. Now we can calculate the average price:

Average of all the shares = Total amount / total shares

10*100+20*90+15*80+12*70 = 4840 <-total amount
10+20+15+12 = 57 <- total shares

Average = 4840/57 = 84

so, we have 57 shares @ 84 price.

Arb888 · #7 27th September 2008, 10:31 AM

I find scaling into shares gives you a much better price that any given single entry or exit as you will never be able to consistently buy the bottom or top therefore an guaranteed average price will never give you a bad price

columbus · #8 27th September 2008, 01:48 PM

Quote:

Originally Posted by fast_rizwaan

You just need the formula to average a list of shares:

let's try averaging 4 times a share:

.......so, we have 57 shares @ 84 price.

Personally I feel AVERAGING in INTRADAY is OK ,but over a period may good unless it is confirmed that we are at the bottom ALMOST.