NEW YORK (TheStreet) -- As an investor, there comes a point when you have to make a crucial choice: Do I sell this dog or do I average down?
Lots of people ridicule the notion of averaging down as a fool's game. In some instances it is. However, like anything else, with head firmly attached to neck, it can make sense.
When investors consider averaging down they have to ask themselves another serious question: Am I buying more of a falling stock because I truly believe in the company's potential or am I buying out of some sort of stubborn refusal to take a loss or admit that I was wrong, even if only temporarily?
Even though NOK belongs in a class with the likes of Research in Motion (RIMM), it can, in some respects, provide a nice comparison with INTC. By a similar token, you can use INTC and AMD comparatively.
In the long term, I don't think I am wrong on Nokia. What we're seeing now is a company fight for survival during a tense period of transition. Nokia's market share and revenues continue to plummet. It should come as no surprise that investors continue to decimate the stock. I have a contrarian view on Nokia. I consider this weakness, as painful as it is, temporary. Because Nokia has, in contrast to RIM, made many of the correct and difficult decisions, I believe it will come out of this period relatively strong. But, being contrarian does not mean you have to be a stubborn fool. We're trying to invest for our futures not play a gain of macho right or wrong.
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