Guess I'll try once more... then take a break from the boardThis is the way bear markets work. As they wind down, you feel sand papered to death.
You're tired... you're ready to give up. You're looking for answers... if only we did 'this' or we did 'that'.
You forget that the 'news' means very little when it comes to the short term performance of the stock, because it is swimming upstream against a very strong current of negativism.
More than 50% of stock performance relates to macro economic and sector-related factors (not company specific).
That is why -- if you are a value investor -- you don't draw a line in the sand and say, "This is the bottom." Rather you try to identify the survivors, scale into positions and then hold on for dear life. You wait out the bear market, knowing that the cream will rise to the top once the bear ends and cycle inevitably turns.
It's funny to listen to oil bulls on CNBC, arguing that the bottom is in. They should have learned something from the breakdown in gold and the mining stocks. When you have a breakdown like oil has had, you do not typically 'V' out of that decline.
If history is any guide, it could be quite some time before a bottom is carved out in our sector.
Turning back to the miners and our particular darling, Wellgreen... Buffett said that time is the friend of quality companies and the enemy of bad ones.
The advantage of the bear is that it helps to separate the wheat from the chaff. And this is the one area in which the 'news' performs a function.
You see, the market has been throwing the baby out with the bath water. That is, market participants have done a poor job discriminating between the 'haves' and 'have-nots' within the junior exploration and development space.
The advantage for the contrarian is that you have the opportunity to identify the minority of companies which are making progress along the development life cycle and gathering dollars to push forward.
In a bear phase, the news is often incapable of lighting a fuse. But it points you in the right direction -- it gives you a reason to deploy capital and to wait it out.
Here's the funny thing. When sentiment turns in the sector for real (and it could, believe it or not, happen somewhat ahead of a major move in the underlying metals), the juniors who have the quality resource and the economic projects -- they will FLY.
They will move higher even if there is NO news being reported. They will be making up for the moves that should have been made while the projects were being de-risked and new milestones being checked off.
While it would be nice for Wellgreen to expand the resource through additional drilling on nearby portions of their land holdings -- it is entirely unnecessary in the long-term scheme of things.
They have already identified a resource which has an in situ value geometrically higher than the current share price exhibits.
Walt Disney stock was under $20 per share at the bottom of the financial panic and it is over $100 today. Do you think the company is worth 5 times more in 6 years because the company was suddenly transformed?
No. It simply wasn't being valued correctly during the bear. That's what produced the opportunity. The change in sentiment has propelled the stock price -- not the 'news'.
IMO, if you are not bullish the precious and industrial metals (on an intermediate to longer term basis), I don't understand why you would own this stock.
And if you are bullish the metals, then everything is going to take care of itself. Because they've got a gigantic resource, in the right jurisdiction. It is economic even in an environment with poor fundamentals for the sector and it is going to be wildly profitable at higher metals prices.
Whether it is .40 cents or .50 cents or .60 cents or even a dollar, in the near term is not going to matter in the fullness of time.
I was already trading and investing in '87 when the market crashed. For a lot of people I knew, it was like the end of the world. Now, go look at a month chart of the Industrial Average and notice how the entire period looks like a blip on the charts.
I know it's hard to imagine that the entire bear market in the mining stocks might ultimately look like that, when gold is $5000 or $10,000 an ounce.
There are many other great little companies, with wonderful projects. Diversify the money across them and then hang on. Wait for the next bull market in the sector -- there will be one. There always is.
Stop worrying about the pennies and focus on the future dollars.
Now, I am going to take a rest from this board and will re-visit in due time. Good luck to all.