Why we must not invest in sinking ship in Stock Market?

Today i want to guide you that we must not invest in sinking ship kind of shares,because eventually they become zero or penny shares one day,and we keep on averaging to reduce our buying cost by thinking that in future, Share prize will rise,but it is seen mostly in cases, they money has been eroded completely.So we must control our emotions in Stock Market,and behave rationally in the same,and accept our Mistake if any done. Let us see with some Examples:

                    SUZLON ENERGY

It was well renowned company in 2005 to 2008 era in alternative sources of Energy, and it was traded@ 1500rs per share kind of, it started falling Since 2008 and have never recovered till date and people who get averaged in this stock,have eroded all money.Suppose one has invested 1 lakh in Suzlon@ 1000, he got 100 shares in 2007, in 2008 he invested 1 lakh more @ 500, he got 200 shares,in 2010 he invested again 1 lakh@ 200  he got 500 shares, now he invested 1 lakh @ 100 in 2012, he got 1000 shares, he again invested 3 lakh in 2015 @ 40 by expecting that from there it will not fall again, that is why he invested 3 lakh this time and got 7500 shares, but stock did not stop falling here, in 2017 He again invested 5 lakh @ 15 ,he got appx 33000 shares.

Now he has Total Shares 42300 shares
Average cost                     29 per share

TOTAL INVESTMENT APPX 12 LAKH

Current share prize is 3.70 paise

NET LOSS @ 25 RS PER SHARE 

42300*25 APPX 10.5 LAKH

90% Wealth has been eroded by Averaging this Stock

                   JP ASSOCIATES 

Same has happened in this stock, i will elaborate its prizes yoy as explained in Suzlon case, Now you can understand the same.


In 2007@ Share Prize @ 1000 per Share

Now @ 6 per Share.

Same money has been eroded who did averaging in this stock in last 10 years


                                               HDIL

In 2007 @ Share Prize of 1500

Now @ 22

Many companies became Zero like KINGFISHER AIRLINES, GITANJALI JEMS VIDEOCON,SKUMARS NATIONWIDE  and thousands of 


So we must invest in Stock Market by Taking Proper Advise if we are not able to do Research by own and if it share fall regularly, never average it, in Market everybody does mistakes, so just accept it as LARSEN AND TOUBRO accepted by holding shares of SATYAM IN 2008, ICICI BANK accepted their mistake by holding KINGFISHER AIRLINES.

BE RATIONAL IN MARKET, THERE IS NO PLACE OF EMOTIONS HERE 

Thanks.