Originally posted by whizard
I, understand what you are saying, but it must be very disconcerting to those who subscribed to the SPP, to wake up this morning to see the market showing 3.8/3.9. Being the eternal optimist I'm holding on to my stock.
The main reason I held off from the SPP is because have burnt my fingers badly in the past. Ie subscribed only to see the price fall below SPP.
Hi whizard
As willius said, if you are investing in these small exploration stocks, you can't let small (or even not so small) day to day market movements worry you. If you do you'll end up with stomach ulcers for nothing! These stocks can be very volatile because their market depth is often thin, so sometimes even small inconsequential selling by one lone seller can move the price down by 15% or more. As an investor in this end of the market, I would suggest that you (i) do your research (ii) pick out the stocks that you feel have the best risk/potential reward ratio (iii) buy these being careful to only risk funds that you can afford to lose (investing in small exploration co's is risky, however it can also provide excellent returns if you get it right) and (iv) hold these stocks until they either strike paydirt or alternatively they are unsuccessful, languish, and you reconsider and decide to sell because you think there are better options elsewhere i.e. their risk/reward has changed in your mind and you no longer see them as good risk/reward propositions. Also, try and avoid being impatient, jumping from stock to stock. Sometimes it can take years for a company to slog away on a project before they experience success - often they never do. That is why I only invest in exploration co's once they report drill results that indicate that they are onto something meaningful - sometimes the something proves disappointing, however at least by using this strategy I have a fighting chance. 30 yrs ago when I started investing I used to just buy exploration co's that I thought had good management, good ground etc before they had found anything substantial - however this strategy proved ineffective as there are 500+ exploration co's on the ASX so the chance of picking a winner is very, very low. It's much better to wait for very promising drill results (this will weed out 90% of the co's), then when a co reports good drill results conduct your research on that co and if everything else stacks up (good management, good ground, infrastructure in place, funds available for drilling, good sovereign risk i.e. Australia, Canada etc, preferably not some risky country in Africa, Asia etc where the Govt is likely to change the rules or nationalise the mine etc), then buy. Good luck!
