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Update August 8 2025

Hummm Should I sell or buy more?

Investors often tell me if one of their stocks drops by a significant amount, they might buy more to take advantage of being able to buy more shares and reduce their cost per share. They do this in an attempt to try and make even more money by having more shares, expecting an eventual rebound. This action of adding more shares to an existing position at a lower price is called “averaging down”.

Although the strategy sounds good and may actually work according to plan, the concept has its flaws and in my opinion, is exactly opposite of what an investor should do. The strategy also defies common sense.

An analogy which might have you better understand why averaging down might not be such a good idea is to think of a dress shop owner.

Suppose a particular style of dresses that the owner has in stock is not selling. After weeks of sitting on the shelf, the shop owner goes and buys more, trying to average down his cost per dress. Common sense would make you wonder why they would do that. After all, the dress is not selling, is obviously not in favor by the customers, and buying more of them will only make the problem worse.

In an attempt to average down, the owner now has even more of a product that is not moving off the shelves. Doesn’t make much sense does it?

The same might be true in the stock market. After all, buyers of stock fall along the same lines as buyers of anything else. When a stock is falling, it is also falling out of favor. Which is to say people are selling it because they don’t want it. Much like the dresses sitting on the rack untouched by the customers, the shares of stock are also being ignored and even dumped (sold) by market participants.

There are reasons why a stock goes down and there is no telling when the selling will stop. People might have a hunch why investors are dumping it, but no one really knows for sure when the stock will halt its descent and go back up. If the stock keeps dropping, some investors will even buy more of it in an attempt to average down again.

On the flip side, imagine the shop has a dress that is flying off the shelf. Would a casual observer fault the owner for buying more of the popular and in demand dress?

Of course not.

The same might hold true for stocks. If a stock is running, think of it as a dress that is flying off the shelves.

Because it is in high demand, the shop owner might even have to pay more for the next shipment, as increased demand means higher prices and that price pull would often bleed over to the maker of the dress. In the world of stock, this means a higher stock.

The strategy of buying more of something when it is rising in price is called “averaging up” , and in my mind, averaging up makes a hell of a lot more sense than buying more of something that is not currently in demand.

In the stock world, buying stocks that are rising is called “momentum trading” and a case can be made using that strategy of investing.

When thinking back to the dress shop, it makes a heck of a lot of sense and the analogy seems to clarify why averaging down might be a losing proposition.

Don’t get me wrong. Sometimes averaging down can turn even bigger profits. But it can also turn into larger losses.

And there are caveats everywhere on trading on momentum. Another word for momentum trading might be construed as “chasing’’ a stock, and that too can be hazardous to one’s financial health. But more often than not, I hear about one investor or another buying more of a losing stock, and usually it is the novice trader.

Remember in the world of the big boy traders who often invest large sums of their own money, cutting losses is the norm. Not adding to them.

A case could be made for both averaging down and up, as well as dumping your losers altogether. But sometimes trading doesn’t have to be rocket science.

It can be more like just using plain old common sense.

“Watching the markets so you don’t have to”

(end)

(As mentioned please use the below disclaimer exactly) THANKS (Regulations)

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services. Email: news@moneymanagementradio.com

Update If itg aint a Boeing I will be going July 20 2025

Boeing Will we still feel safe?

An airline pilot friend of mine with decades of flying experience once told me a familiar saying among fellow pilots, “If it ain’t a Boeing, I ain’t going”.

Boeing is a major manufacturer of passenger airliners and is once again in the news as one of its planes was involved in one of the worst airline accidents in decades.

An Air India flight, a Boeing 787 Dreamliner, crashed immediately after takeoff, June 12 at the Ahmedabad airport in India. Until last week, the 787 had no major incidents.

I am not an airplane expert, but being a market analyst, and since Boeing is a publically traded company, I do follow it.

In 2018/2019, Boeing’s “Max” version of its airliner apparently had a software deficiency that caused two of its planes to crash, killing all aboard on both flights.

As recently as June 5,2024, a door blew out at 16,000 feet on an Alaska Airline flight of another Max plane. Luckily, the plane landed safely with no fatalities. Had the door failed at higher altitudes, the outcome could have been much worse.

What caused the reputation of a once stellar company, that was known for its engineering excellence in airliner manufacturing, to miss such a serous design flaw as to cause two of its planes to crash and have a door blow off in flight?

Although known for its excellence in engineering, the rumors since a merger with another aircraft company, McDonnell Douglas in 1997, were that profits became the main focus of the new conglomerate.

How could Boeing allow something as simple yet as lethal as a software glitch (and an additional lack of a backup device which was rumored to have saved a few bucks along the way) gone unaddressed.

Profits over people?

With this latest crash, Boeing aircraft may be once again in question. Struggling to rebuild its reputation after the first two Max crashes, Boeing spent billions in inspections, redesign, more manufacturing oversight and changes in leadership.

Things looked to be improving until last week’s crash.

The way the plane went down so soon after takeoff has led to many unanswered questions.

Was it pilot error, a maintenance issue or a design flaw?

The “black boxes”, which record both pilot conversations and pilot control inputs, have been found and are currently undergoing analysis in an attempt to find the cause of the crash.

All that is known is that the pilot issued a mayday call which mentioned “loss of thrust” and the plane uncharacteristically stopped its climb a few hundred feet after liftoff and fell back down to earth.

In the modern age of airlines, a major crash is extremely rare. Statistics show the odds of perishing in an airliner crash are one in 816 million, which is far lower than being hit by lightning in any given year (one in 1.2 million) and dying in a car crash which is only one in 95.

The circumstances of the Air India crash are odd to say the least. For a plane to lose complete thrust, if that is indeed what occurred, is, according to experts, said to be extremely unlikely.

Social media is rife with posts about what might have caused the crash. Needless to say, the posts range from speculative to ridiculous.

We may never know the true cause of the crash, but odds are the black boxes, if readable, will lead investigators to a conclusion.

Should it be found that a Boeing design flaw was the root of the catastrophe, the airline industry would probably find itself in serious turmoil.

Planes could be grounded, causing serious delays and cancellations worldwide. Massive inspections of existing planes or even reworks on any systems found to be at fault would likely cause similar issues.

The spillover could be extremely serious to air transportation everywhere and for a prolonged period of time.

Having an overseas trip planned myself, I have, for the first time, purchased travel insurance.

More importantly however, would be the effect of such findings. The families of the victims are already suffering. Finding out a manufacturing mistake may have caused the crash would likely be even more distressing.

What happens to Boeing as a company remains to be seen if they are found at fault. But being one of the few suppliers of airliners around the globe, such a finding would likely be a very serious matter for both the company and the flying public.

“Watching the markets so you don’t have to”

(end)

(As mentioned please use the below disclaimer exactly) THANKS (Regulations)

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Money Matters update June 30 2025

If there is one thing I have learned over my many decades of life is that things we thought would change things forever never do.

I have lived through wars that I thought would never end, economic blow ups that were certain to end the financial `system` as we know it, Presidents that were too good to be true (and were) and the other kind as well.

No matter how bad or good things got, they always reverted off the extremes and delved back into normalcy, if there is such a thing.

Fast forward to today and we have a contentious political polarization, more foreign strife complete with bullets flying and people dying, inflation eating away at consumer pocket books and more weird things in general happening that make one think mankind will certainly be changed forever.

Not so and don’t worry too much about it I say.

Been there, done that and we always seem to survive as a species and the lights remain on.

I used to think and subsequently fear the many things that would pop up both economically and in life in general and never be able to see the forest through the trees. Whatever occurred seemed too dire and serious that I could not imagine that anything like what I was witnessing would work itself out so everything would be ok.

I would lose sleep, furl by brow and wring my hands along with the rest of the good people around me and be absolutely certain the end was near.

But it never came to pass.

What did pass was the thing I was so certain would never pass, and life went on as it always seems to.

I don’t know if its divine intervention, the intelligence of the human race or just the luck of the draw, but we seem to persist as a species and the markets seem to keep on chugging along, climbing the proverbial “wall of worry” as it is said.

Indeed, not only do the markets climb the proverbial wall of worry, seemingly life does too.

We fret as investors, we worry as dads and moms, sons and daughters, friends and neighbors and workers and bosses.

Seldom is the keel even, the winds steady and the seas calm. And if they are, we know another tempest is just off the port bow and we must be ever vigilant.

And so it goes with our markets today, our environment, our lives and our world.

Anytime I worry a bit TOO much, I remind myself that, whatever it is, this too will pass.

And it will.

I just know mankind likes to meddle with stuff, we strive for strife it seems, and we like to turn over apple carts and change things seemingly just for the sake of changing things.

And so it goes.

As economist John Maynard Keynes once implied way back in a 1923 musing of his: “in the end we are all dead”.

Not much comfort there, I know, but the jest of that matter seems to be don’t worry too much.

I think back to a line in the movie “Jurassic Park”, which seems to sum it all up. “Life finds a way”.

And it certainly seems to.

(end)

(As mentioned please use the below disclaimer exactly) THANKS (Regulations)

MONEY MATTERS UPDATE JUNE 28 2025 SAVINGS BUCKETS

SAVE AND REAP THE REWARDS

Families are always looking for solutions when it comes to saving for a variety of wants and needs. The reasons people want to save some money might be for a kid’s college, a vacation, a new house or boat, or just want to build a nest egg for retirement.

As a general rule, whatever we might save for, the money usually gets dumped into one account like a savings account or maybe even a checking account, although checking accounts are easily pilfered by our need to pay a bill or what have you. Having one big savings account is common but humans always function a little better at accomplishing things if we have a goal in mind, and some sort of constant reminder about that goal.

High yield savings accounts, being the preferred method as we want to earn as much as possible on our money, can offer a feature that many may not be aware of.

This feature is called “Saving Buckets”. Saving buckets are like envelopes in the one main account. They let a customer set up categories for each specific savings goal they might have in mind. These are offered by many banks and are free to set up. You can track your savings for a specific item. In other words, if you are saving for a new car, you can set up a savings bucket entitled “New Car” and dump money into that envelope.

In this way, by having a specific account for an item, it keeps in the forefront exactly what it is you are saving for. You can set up multiple buckets and designate what money goes where.

The advantages can be obvious and not so obvious at the same time. Naming an account keeps the specific need right in front of you and may allow you to make better choices as to how much to allocate to it and when. The balance for whatever it is you are saving for is also front and center whenever you check your statements.

The concept can also incentivize you to save more and make it easier to track your progress on each specific item.

Using buckets under one main account can also eliminate the need for multiple accounts making tracking your money easier.

Additionally, by maintaining only the one main account, the balance would be higher than it would be if holding separate accounts possibly qualifying you for a better interest rate as banks usually pay more the higher the balance.

It may also reduce any fees that banks might charge for each account as the buckets are considered just a piece of the one main account. You can also transfer money between buckets if something changes or even eliminate or cash out a bucket if need be.

There are, of course, things to consider when looking at establishing saving buckets. Savings accounts in general may not offer as much return as time constrained, fixed income options such as a CD or savings bond.

Savings accounts can also see their interest rates move down while CD or bond interest rates might be set for the life of the purchase.

Also savings accounts over $250,000.00 exceed FDIC insurance but that particular draw back can be reduced by simply naming an additional beneficiary to an account. This is because each account owner is eligible for up to $250,000 in FDIC coverage per beneficiary. Setting up beneficiaries on your account can increase your FDIC coverage.

Not all banks offer saving buckets and the number of buckets a bank might allow is also company specific so ask your bank if they offer this option. If not, you can easily find a bank that does.

There usually are no minimum amounts required in each bucket and every bucket, being just a labeled envelope, earns the same amount of interest as the account it is under. Remember, when you have saving buckets, it is still only considered one account.

Saving buckets are kind of a cool thing many people may not be aware of but they may help you better achieve your personal finance goals and needs.

“Watching the markets so you don’t have to”

(end)

(As mentioned please use the below disclaimer exactly) THANKS (Regulations)

NEW DENTAL AND VISION LOW COST INSURANCE

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Update HOW TO RUN AND MAKE MONEY IN THE RESTURANT BUSINESS JUNE 8 2025

This is a sign of a good resturant- People eat and spend a lot!

Last month I wrote an article on running a restaurant and as I was writing it, I realized, with a few specific differences, running a successful business is just as easy, or for many, just as hard as the very difficult restaurant business.

Actually it can be maddening to start a business and probably as it should be. For if it was easy, the things that make it hard are the seeds of giving good service and/or providing a good product.

An entrepreneur that starts a business will find out soon enough whether he or she is doing it correctly by how many “votes” they get in the process.

Votes in the business world are dollars. Put in simple terms, although business startups need time to get the word out and attract customers, eventually, given enough time, the votes (dollars) should start trickling in. Either that or what you are offering is not very much in demand.

The longer you operate, the more dollars (votes) should come rolling in. If you are doing it right that is.

I once had lunch with a business mentor that had been in the business of mentoring for many years. He made the comment he was having a hard time monetizing his service.

To me, that meant he had a hard time making enough money at doing what he was doing. In business terms, he had a hard time getting enough votes.

People vote with their dollars. Offer something they want and they’ll cast their votes your way and fill your coffers.

Take APPLE for example. Apple gets billions of votes every year because people love what they offer in the form of their phones and their ancillary businesses like the APP STORE.

If a new business is opened and the dollars don’t eventually start flowing in meaningful amounts, it either means the public doesn’t need or want whatever it is you are offering or in the way that you are offering it.

In the restaurant business, it might mean they don’t like your food or your service. If it’s a clothing boutique, maybe they don’t like the clothes you’re selling, or maybe your prices are too high.

It could be a number of things that are causing you not to get votes (make money). The bottom line is the public, much like a disliked politician would lose due to lack of votes, are not casting enough votes in your direction.

I can’t tell you how many people I talk to year after year that couldn’t make a business work.

Like my previous article mentioned: nine out of ten new businesses end up in the trash heap. And unfortunately, may do significant financial damage to the entrepreneurs in the process.

The failures are not tied to any one type of business, although the restaurant business seems to be the top dog in business flop overs along with web based businesses. Web based businesses have many home based platforms which are started on an idea and a whim with often little capital, which may be why the numbers are so high for web business failures. As for the high number of restaurant failures, as anyone that has run one will tell you, it’s a darn hard business both in hours and profit margins as well as the inherent mechanisms of offering a perishable item.

In conclusion, starting a successful business can be very rewarding both financially and personally if you come up with the right recipe both in your offering and how you offer it.

There are many things you will have to address and navigate in the process of starting a new business and I won’t list them all here due to space constraints, but plan on working an ungodly number of hours to both start up and run your new business.

You can forget about sleeping in and better plan on long days and even longer nights. Most successful business owners will tell you they never worked harder nor longer. It’s just the way of it.

Those that refuse to put in the long hours are probably the nine out of the ten that fail because they went back to bed.

All kidding aside, it’s damn hard to open a new business. So make a solid plan, perhaps get a mentor, listen to advice and research, research, research.

It’s not easy but it’s worth it if you do it right.

“Watching the markets so you don’t have to”

(end)

(As mentioned please use the below disclaimer exactly) THANKS (Regulations)

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