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Re: nopancakemix post# 133356

Tuesday, 08/13/2013 8:31:28 PM

Tuesday, August 13, 2013 8:31:28 PM

Post# of 238399
No, it's not "wack" mathematics, unless you're in the habit of using this word to designate simple ideas that you fail to understand. I'll try to explain this in a more simple manner.

If a person has 1,000 shares purchased at $0.03, that person will have $30 worth of shares. If the price goes up to $0.20, the person doesn't sell, and then the price drops back down to $0.03, that person can then sell those shares at $0.03 for $30. By never selling while the price was higher and then waiting until the price dropped back down to $0.03, the person forfeited his chance to make a profit from those shares.

If a person has 1,000 shares purchased at $0.03 and then sells those shares at $0.20, he will get $200. If the person then uses that money to buy more shares when the price drops to $0.10, he will be able to pick up 2,000 shares. If the price then drops back down to $0.03, the person can sell the shares for $60, which means he'll still come away with a $30 profit on his original purchase (assuming no trading fees here for simplicity).

You're choosing the former option over the latter even though the latter is more profitable.