Regardless of how long you have been in an investment, the question always comes up at SOME point: when should I add to my position?

Since we are all familiar with the price history of PTK, it might prove instructive to share our experiences and approach to this part of the investment process. Because decision making under uncertainty is never easy, and almost always contains details that make every situation different, the more people share, the fuller picture of a market reality can come into focus for all of us.

When did you? When should you?

Looking at the chart of PTK, two recent examples of extremes leap out for comment: The run up in the spring of 2014, and the collapse of October 2014.

What was the fundamental truth that was driving the run up starting in late 2013? What were the half-truths that attached to the truth that got spun into a momentum driven run?

I see that the volume didn't explode until Feb. 2014, what was the story then? Knowing today that the move wouldn't be sustained, was there still a fundamental change/truth that made adding during the run up still a good decision? Was risk being mitigated by something the company was doing?

Conversely, my recollection of this past fall was that many here were quick to understand and share repeatedly that PNP was selling, and this had to do with Sheldon over leveraging his company, and nothing to do with fundamentals in PTK.

Did anyone add in October? Personally, I wanted to but didn't. I believed that it was a buying opportunity, but wasn't willing to liquidate other postions to do so. You are just never 100% certain of anything after all.

Livermore says you should always add on the way up, but he was a die hard trader, so maybe that isn't correct, but maybe it is?

Long term holders have the advantage of picking their spots, as well as having time to do the due diligence necessary to actually understand the specific risks that any given investment presents.

Q: When should you add?

A: When the risk/reward trade off changes in some material way. Either risk has been mitigated, or the reward has expanded.

When has PTK management materially reduced risk, accompanied by very little change in the share price? Hiring a CEO? Hiring a COO? Completing the last publicly disclosed technical milestones? Sounds pretty good on the risk side.

What about the reward side?

Eileen spoke earlier today about the industry's attitude toward disruptive technology. Very enlightening for those of us who aren't in the industry. These people have non-economic incentives to keep quiet about the Poet story. We here, for the most part, do not. This is a meaningful advantage! Not a single US mutual fund can be involved here. The buzz and chatter of humans working in the valley is all sub-rosa. This is a canadian company doing R&D in Connecticut? Are you serious? yes, I am serious. well, yeah, call me when they move to somewhere I can spell, like San Jose...they just did!

Today, PTK stands at a fantastic risk/reward trade off. When was it better? When were so many critical hurdles removed while market interest (defined by trading volume and institutional demand) was so low? Yes, the price has been cheaper, but at those times the risks were much, much greater.

When the milestone completion is announced, the stock will pop, but doesn't it feel stupid to buy AFTER it pops? No! because removing the biggest risk the company faces is meaningful, and the stock isn't going to pop to full value in one morning.

On friday I outlined my program for adding under the circumstances of a late announcement/correction. But what if I'm wrong, and they announce on June 30th? Or what if they are late, but the stock doesn't correct at all?

Then I will buy the announcement. I will gladly add 10% at $2, even $3! Can you imagine the ambivalence I will experience buying PTK at $3? Feeling stupid cuz I coulda' had it at $1.50 yesterday, but simultaneously knowing that the other 90% of my investment just went up 50-100%!?

Sounds hard. And that's why I think its the right move.

In my opinion.