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Skullcandy, Inc. Message Board

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  • kevin.grygiel kevin.grygiel Oct 10, 2012 10:13 AM Flag

    Motley Beats up on SKUL again

    I would like to average down again today but I already have nearly 5% of my portfolio in Skul.... What to do here? I have tons of extra cash however, but my intent is to save that for the 10-20% dip faber is calling for by early next year....

    Any suggestions as to how to play this? November $10.00 calls?

    Sentiment: Strong Buy

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    • Kevin, I never average down. I never add to a losing position. I only risk 2% in any one trade. That is, I first establish a stop price, then I know my risk. Knowing my risk on the trade and knowing I can only risk 2% of the total portfolio allows me to compute how many shares to trade. But if averaging down is your strategy then I guess it makes sense to buy at low-volume retests of the lows.

      • 1 Reply to onepoint272
      • That makes sense, and is advice I follow on nearly all of my other trades. I'm only 26, and just recently got a well paying job, so I only started investing seriously in around august of this year. So far, the only positions I have averaged down are SKUL and DDD.

        I feel that averaging down on these companies is a good move for three reasons:

        -they are strong solid growth companies
        -my exit strategy for these companies is to hold for many years
        -high volatility.

        I will let you know that I decided on Nov 12, $12.00 calls. Purchased at the low of today at $1.45.

        At that value, the amount of contracts purchased equates to 20% of my stake in SKUL, and makes up 1.4% of my total portfolio.

        Since I am young, my intentions are to invest aggressively :P

        Sentiment: Strong Buy

 
SKUL
5.76+1.08(+23.08%)Jun 24 4:00 PMEDT