Dollar Cost Averaging

Pier 1 Imports (PIR)

If you estimated the value of the company in 2008 at $12/share (like Warren Buffett did), you probably bought it all day long for $4. What happens if the stock dropped to $1 and you still valued the company at $12? Would you sell or buy more? This is the hardest question for investors of all experience levels to answer. Yet, between 2008 to 2012 the ride of PIR was remarkable and dollar cost averaging would have produce solid results.

Cliffs Natural Resources (CLF)

Another, more recent example is that of Cliffs Natural Resources (CLF). At the start of 2015, CLF was traded at $7.03 a share. By the start of 2016, the stock was down to $1.61.

Petrobras (PBR)

Another recent example is Petrobras (PBR) the Brazilian oil company. At the end of 2014, PBR was traded at $9.72 a share. By the end of 2015, the stock was down to $4.74.

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Jonathan Poland

Jonathan Poland

20+ years analyzing and forecasting complex assets at the highest level of the economy. These are notes from my journey. Learn more @ mrplnd.com