Warning or not warning. Even so called blue chips like RBS, UBS and not to mention one or the other financial institution from the US were still strong buy recommendationsin summer 2007. Meanwhile their share priced collapsed considerably (between 60-80 % from the highs) and we are here not talking here of high risk investment but world leading financial institutions with more then 100'000 employees each. So let's be fair, if the zinc price today would be still at 4000 $/ton we would surely had the pleasure to see a share price somewhere between 40 and 60 cents (my guess)or more. So the story was consistent. Mumbwa looked exciting (and could be still a exciting thing) and so on....and must of us were or are still long term investors. I (unfortunately) never sold one piece.
What went wrong is also clear. Fall of the zinc price (crucial element) and at least a sub-optimal management. It is clear that analysts and experts are always more clever then all the others...but usally they recommend to late to buy and to late to sell. So the same share that was a buy 12 months ago nowadays is a hold if not a sell. Everybody of us knows such stories. Some years ago I bought ABB (former Brown Boweri in Switzerland) at 1.20. The share came from 20 ! and most analyst told us to sell and set the target at 0.50 ! I sold a quite substantial number 2 weeks later at 1.70 and was more then happy because everbody was telling me that ABB would be dead in months time. You know what ? At 8.00 the first analysts started to recommend the share againg....then at 16 and at the end at 28. The high was something around 35, today 27. Maybe you may not compare AIM to ABB but nobody can guarantee me that AIM is worthless in 1 or 2 years. Let's face it, the zinc is still in the ground and Mumbwa could be a valid story in a few years. For somebody who buys today at least there is a certain chance to have a multibagger share in his porfolio in a few years. Nothing is impossible and at the end of the day I would say: Buy on bad news....and sell on good news !
I am honestly said a little bit frustrated but on the other hand the uncertainity know is over. Let's wait for VTEM Survey and Drilling Results and let at least give Bill Cash a chance to make it happen despite all negative sentiments. There is still hope....zinc in the ground...and a possible "olympic dam style" Mumbwa. Maybe in 5 years we will regret to not have bought at 3 cents....who knows ? Somehow I have the feeling that AIM maybe - after release of some good Perkoa/Mumbwa results - could be a looooooong term buy with a possible nice reward at the. If nothing comes out from Perkoa/Mumbwa survey/drilling results....then I think we will get back again our money.
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