DD, stocks with low expectations in which everyone has lost interest fall to the lowest possible price. I always like to buy at that sort of price. Then all the company has to do is show that it is viable.
But stocks with high expectations are bid up higher, thus making them more expensive. Then investors get disappointed, and they sell and it moves back down.
Expensive is bad. I can buy more when the stock is cheap. Cheap for MNTA would be like 2.50, around cash level. I doubt it falls that low, too many will buy the dip and push it back up.
Once a stock hits bottom and you buy and then it moves up, it usually keeps moving up till at least a double. There is no one left that wants to sell.
MNTA is the type of stock I need to sell when it moves up so I can buy when it move back down. I really don't like trading all that much, I prefer to buy a large position when the stock is at a bottom and just hold on.
It doesn't have much to do with margin, it has to to with validation, with being able to buy a really large position, with eliminating all the positive expectations. And you have to admit, it is more pleasant to hold a stock that you buy and it has already moved up 2-3 times. Not likely to fall back down to your buy in price. While MNTA could fall to 6, or it could move back to 10.00, hard to tell.
I seldom use use margin, most of the time I keep from 40-60% cash with no margin so that I can buy stuff when it gets cheap, then sell ~ 1/2 when / if a stock triples.
Like buying GTCB at 11 cents when you told everyone you sold out. Low expectations caused a dramatic bottom and then the stock to move up almost 9 times, even though I thought GTCB was a poor investment.
All in all, low exceptions is better, but I doubt MNTA ever gets into low expectation.
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