Covered in the Orphan section , 😁😎

Moosehead Money

DT, thanks for mentioning Eloro; it’s been off my radar for months—-I can now add it to my watchlist of stocks I’m waiting to purchase when they bottom. That stock looks broken for quite awhile now.

Yes. Look for bargains and trade-off bargains, but look for those that are clearly showing volume and grade that are already showing easy to mine and a lot of resource.

Good points DT, on being nimble and updating one’s due diligence on companies.

For example, with Eloro, there was a lot of hype and hyperbole from retail throngs the last few years as things kept progressing with their drilling to the point when the resource estimate was getting ready to come out just a month back… Then initial resource underwhelmed the market expectations on grade and tanked post resource announcement. We’ve seen that same movie over and over again in this sector.

There is still a lot of metal in the ground there in that resource, but a number of investors and pundits were critical as to what the economics may be to actually extract those resources in a larger operation at those average grades depicted. THAT is why the selling in ELO suddenly accelerated to the downside in late August and early September on large volume as many bailed on positions. However, there are 2 sides to every market, and there were people buying on the other side of that selling to accumulate Eloro into the recent weakness, so clearly other investors see value there. I was considering taking a deeper look myself now that it’s been taken out behind the woodshed and beaten, but there has been so much back and forth with investors lately highlighting the good, the bad, and the ugly, that to me it just seems simpler to accumulate companies with a more clear value proposition or less uncertainty.

The point being that it is important to note when selling is the result of poor sentiment only with the story still very intact, versus when it is actually fueled by the latest news underwhelming expectations. Not every selloff in a company is a buy, if there are skeletons in the closet. However, the sentiment has been so bad lately that even good to reasonably good news events have become liquidity events. Also there have been good resource estimates put out by other companies that generated similar selling when market expectations were too unreasonably high leading into it, and then the company has to really work double-time to regain trust and show their value proposition.

For another recent example, just look at Aston Bay (BAY) where it rocketed up 400%-500% in August into early September on good copper drill results, and now just a month later has done a return trip almost all the way back down again as gravity and reality set back in, paired with tough investor sentiment the last few weeks. That was a rocket ride up and then an elevator ride right back down again.

For those that traded that that move successfully, it could have really bailed out a lot of losing positions in one’s portfolio. However for the “Johnny come lately” investors that piled into the stock after it had already blasted higher, following the herd….. those punters were left holding the bag. It wasn’t just those piling in on the latest craze though…. additionally, many longer term shareholders that have been upset with the selldown since 2016 or 2018, just sat in it last month watching it surge higher to those levels, and yet so many didn’t take any action to harvest great gains when they presented themselves. Those same people likely think you can’t make money in junior mining stocks, blaming the sector, but when they have the big gains, they fail to harvest over and over again. It takes looking in the mirror and personal accountability, and often people’s greed or fear emotions cloud the logical path to successful speculating.

As we’ve mentioned many times on here… these junior resource stocks are often like “lit matches” and it is typically best to take the wins when they present themselves (at least on partial positions) as they often disappear quickly after going up one side of the parabola and then down the other side of it.

Out of thousands of junior mining stocks for the last decade+ there have been very very few that have been longer term buy and hold positions for years. This has not been a Livermore “be right and sit tight” sector, and those that conflate commodity juniors with the blue chip general equity stocks he was talking about in his book have missed the point the whole way along. These stocks have been trades, not buy and holds for many many years now. Most have a season or two of upward thrusts (3-6 months typically… maybe a year or so) and then after such outsized gains, they either channel sideways to down or worse, some turn right back down again with a vengeance. Knowing when to sell is just as important as knowing when to buy.

Perverts running the show… just like, Roman times.. actually it is just the continuation of the group from Rome

Remember it well. I was a painter back then. The general contractors started joining the investors in the deals. For 3 yrs or so they lived large then they went bankrupt. Stiffed all the trades…..and then started up new companies under a different name….. only problem is that while liberals are in power immigration is always higher. Rates haven’t hit the capitulation point yet it seems.

UUP:GLD broke above my “important resistance” yesterday and today’s much bigger leap is consistent with that level being important. It is now overbought and sitting at a 10 month high…
https://stockcharts.com/h-sc/ui?s=UUP%3AGLD&p=D&yr=1&mn=0&dy=0&id=p85996395634&a=1482248993