When a stock's price steadily slides from "penthouse" price to PN17 or penny level, that is 0.005 sen, we often read comments by some so called experts in investing or so called long term investors that they are averaging and stand to gain more. Is this true? Let's find out from an hypothetical transaction of a stock made by a CAT.

ASSUMPTIONS.

Initial purchase was done at RM1.00 for 1000 units.

Subsequent purchases are made at every dip of 5 sen and the quantity purchased is a constant 1000 units.

A constant 5 sen dividend is paid, quarterly.

​Cost is shown as running total.

End value is cost minus dividend.
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Although the price is sliding down, our long term investor with balls/tits of steel continue to put a brave front and buys.

It takes 21 transactions with 5 sen erosion to reach a pitiful price of 0.005 sen.

Well, I don't know how this fictitious company could continue pay dividend when it's market capitalisation is eroding. but the argument is they keep for loooooooooooooong term and dividend.

The only positive outcome is, our expert now has a huge quantity of "toilet papers" and keeps praying for a miraculous spike or "intervention aka bailout" wink* wink*

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