make it clear... buying a stock that is under 1.00 is fraught with a high percentage of failures... where 2 to 5 percent of the issues... that are traded, may have a glimmer of hope to be actually successful... even that success has it's limitations... the small cap world is driven by hype and speculation... most of the plays except for a few will see back to 10 to .30 cents in the next few years... some will reverse split, and some will rename at the same time, or individually... some will fail to get financing, and do a chapter 11 unless, the issue actually has the capabilityof going into the mining business,,, as that is the area we are playing.. within that playing field, there is a set of Market Motivators that take many undeserving, and deserving stocks in exuberance to an overvalued state.
On a technical base in momentum... Sentiment fear and greed, the true meaning of a double top comes in the form of the multiple highest high... (My observations in charting) such after that... there better be some real meat to the issue... even then with real meat, if the hype is not there, neither are the buyers...
The closer you get to 5.00.... the closer you get to success, but also closer to intelligent fundamental buyers.
When playing in the charting area of continuations between 1.00 and 2 dollars, you graduate into a type of play that likely will not hold any value over 2.00 to 4.00 for long, and the resulting consolidation can last for years... it is human nature to tire quickly of something that rose too fast, and look for something that is going to provide the next injection of adrenalin.
Don't fall in love. Lately I have been presenting some continuation plays... recently I read a Stockhouse post that was put out by Rick Rule....
Rick Rule
he said it beautifully... but the one thing in the assessment he did not detail is the period of speculation that in it's volatility is where fortunes are made and lost. He artfully presented a pick EDV.TO and so it goes into the public charting list and level II for observation. A south African play @ 2.90
I regress...
Few people have the guts to buy .02 cents.... most have mental area of .16 to .50 cents as thier belief level depending.
Recently I posted a play that fits Rick Rules criteria... except that he failed to define the one aspect clearly in the sense, that before the shoe fits... there is an opportunity to make money...
In order to do that... you need to buy real low... use level II to look for distribution... and don't fall in love when you see 30 to 100%... do something that fits your needs when it comes to taking some money off the table... A gold story that can't get over 1 million ounces in measured reserves... even in production is real risky.... to pay over .50 cents without the 1 million in sight is foolish. JMOP
A rule of thumb for real top dollar miners in gold is measured in ounces per ton... High grade open pit is 3 to 6 grams per ton...low grade bulk tonnage is 2 grams per ton and less (open pit). There are some arguable numbers in that assessment, not accounting for CAPEX (Capital Expense to build and take to production).... but it's in the ball park. The price of present day gold is bringing these numbers to reality.... over 1000 dollars per ounce as a real number, makes a lot of impossible plays open for speculation for the 1,000,000 reserve threshold workable. Exploration can be financed.
At first glance his rule fits LAQ.V ...... except for a few minor details in particular... If all they had was 500 thousands ounces, and went into production... even at .085 cents to .10 cents... there are enough speculators who fail to recognize the exuberant market value, and what I see at .075 to .10 cents... someone will see at .15 cents and so it goes providing management doesn't abuse options indiscriminately through lack of skill.
Recently LAQ has had some exposure to some higher profile risk takers...(the promo is on) Options are in the .05 cent area... diluted float is not exuberant(MOP). According to the high profile speculators who toured the operation... the consensus was that the final stop was not limited to 1/2 a million ounces... but they need to prove it up... the grades howeve,r allow for a low Nevada Jurisdiction style CAPEX (10,000,000), if they can finance to bring the potential 500 thousands ounces they think they have.... to open pit production in Friendly Nevada as a self financing option... even if that's all they had in the end was 1/2 a million ounces in production... there is still merit at .085 to 10 cents for an early play position...
If they can milestone the 1,000,000 ounce threshold then .085 to .10 cents is going to seem awful cheap...
There in lies the speculation... this is real early play... If you wish to high risk your portfolio... you need to get in under .10 cents... You must use real time to see if the management is sensitive... distribution is mild... trading is limited to traders who will wash out, and some real progress is milestoned... so that exuberance will provide opportunity for all us high risk players taking position. I have speculated exuberance based on hype, and/or on wishful thinking to take the share price to a possible mid .30 cents... if and I say if.....! the distribution is managed well by management. Speculation is a word to soften the impact of the word gambling... and this is not a recomendation to buy.
For entertainment only.
GLTA Lostoutwest
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