February 13, 2010
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Hurry Pudding
Thè Hurry Pudding Investment Club can divide the stock mining sector into three categories
¹Big guy producers (Blue Chips) are the large-cap companies with large, multiple worldwide projects – they have their feelers everywhere. Because of their arrogance in size, the price of large-cap stocks tend to move at a snail's pace. They tend to gobble up the small (blue button) juniors - just to get into the news. .Any investor trying to obtain a double or triple in ROI (return on investment) knows it will not happen quickly.
The stone kickers and researchers in exploration make more news happen. Every time they do something significant, they make news, fuel rumour and raise their stock price in speculation. They have few or no discoveries on hand, but are searching with new technologies such as Airborne Electro Magnetics. Unfortunately, the vast majority of these companies will bankrupt before they ever find anything. Mind you, there are some that are well financed, managed and in a strong “maybe” discovery (evidenced by their price spread of previous years). We watch those companies very closely because many shares is better than a few when trading. In between are what the house calls developers or explorers. They have taken a hammer and chisel to their outcrop rock. These are companies that have found strong evidence of economically viable deposits – something to build upon. They may be in the process of proving their find by drilling, or they may have already proven the deposits and be in the process of building a mine. Or they could have already begun production. Both explorers and developers are often called juniors or penny stocks under $5.00 . When they prove the existence of economic deposits, these are the companies that can bring investors explosive profits — virtually overnight. Remember the blue button equation based on the 52 week spread column. I recently checked out the bid and ask listing and saw several stocks that show a variance spread of a mill (.001) to double digit dollar in value.
(H – L) / L * 100 = x% gain LY.
It's all elementary arithmetic and algebra in finance – a child learning could do it on ledger.² Bull High Price minus Bear Low Price divided by the Bear Low Price multiplied by 100 equals the Percentage Gained last year if bought Bear Low Price. Remember there are other tests – quick cash trades and personal service count in statistics too.
Sources:
- British Fantasy Pics
- Investment Research
