Pow! AMRN threw me a sucker punch and I caught it when I wasn’t looking. I was looking at my ticker yesterday after the closing bell had rung and I saw prices printing below $10 buck. At first, I thought I was looking at another symbol that was printing $9+ on average; but when I realized I was looking at AMRN. The punch caused me to utter, “You’ve got to be kidding!” Despite my usual expression of profanity when describing an emotional outburst in my past posts, I’m actually pretty “clean” in my day-to-day expression even when I’m upset. Yes, I am merely trying to emulate YOUR emotional expression in an emotion settings in my blog posts whenever I’m expressing profanity. (grin)
I checked the news and found out AMRN decided to go solo and got a $100 million loan to do so.
Now, I do have this possible scenario factored into my risk assessment; so it is not an unexpected punch on the face like you normally get from your mistress/girlfriend/wife in that order. The way I see this scenario, AMRN is only doing what a tough negotiator is expected to do- you show your tough stance by your ability to walk away from the deal.
“You don’t wanna pay the price I think is fair. Fine, I can do it myself and probably make even more money doing so. Bye bye!”
“I know you’re bluffing” the prospective buyer countered.
Now, we are watching the action being taken by AMRN.
In a nutshell, I’m in AMRN for the success of their magic fish-oil pill. So, I’m hanging to my dear shares. And yes, I’m NOT AVERAGING down here. You see, by not averaging down ever, I know my EXACT risk at all time. I know what my maximum loss is going to be on the get go and therefore I never lose sleep on any drawdown I’m going through.
On the other hand, if I’m averaging down for every price decline, I’ll be a nervous wreck by now because my risk will have ballooned to the level that I do not expect or anticipate. Now you know why I don’t average down.
Previously posted here.