HOW TO MAKE SENSE OF THINGSWhen you're in the market, whether you know it or not, you need to have a good understanding of what is going on. If you don't, you're esentially left with your emotions, and in the market emotions kill.
I'm going to get into this explanation by use of an analogy, but first let me make the following statment:
"Oh, and by the way, the price is $XX.XX"
So what's the first thing we look at when we check our stock? The price of course! And for some people, that's mostly where it begins and ends. If the price is up, they feel happy and vindicated. If the price is down, they feel the opposite. But for a LOT of the retail crowd, this limited view of things only leaves them with their emotions to fall back on. Their view is completely plastic and one dimensional, and it is why the retail crowd is so brilliant of selling at the very bottom, and buying at the very top. Again, it's pure emotion, and emotions kill.
So when I say "oh, and by the way, the price is $xx.xx, what I'm trying to highlight here is that the price is an afterthought to all the things that are driving the price. And true survival and thriving in the market is to have or develop a strong understanding of those motivators.
Now, to the analogy, I liken it to having 30 people in the room, Each of those people are there, because I deem them important. They all come to the stock from different vantage points and different perspectives. No one has more power than another, and rarely do they all agree. In fact, at times they couldn't be further apart on their views.
But in real-time, I actively interview all of them and monitor their opinion. And not only do I want their opinion, constantly, but I want to catch if their opinion starts to change. So let's apply these 30 people in the room to Bombardier. As noted, rarely do I get agreement in the room. At best, I hope for at least mild consensus. On rare occasion, I get consensus with some actual excitement. So what about Bombardier right now? Right now, I literally have not only consensus, but a strong unanamous endorsement complete with practicaly unbridled excitment, table pouding and fist pumping.
In decades, I've only seen that a couple of times at best.
Now, it's important to note here that I've chosen these 30 people in the room carefully. I WANT them to argue. I WANT them to come from different vantage points. I WANT them to have a mind of their own. By doing this, I find far more stocks that "don't meet the bar" than stocks that do. That's fine with me. I want a high bar. It's what keeps mistakes to a minimum. And even after I enter a stock, I seek their opininion, regularly, even more, because now it counts. I've got money on the table.
Now, let's go back to the price. Sure, the price is important. I'll even say that price is one of the people in the room. BUT THAT IS ONE PERSON OF 30 PEOPLE. NOT the only one. NOT the most important one. Just one of 30. And this stance and approach, I think, is vastly different than most retail.
So in the midst of this explanation, again I want to go back to "where we're at", in real-time. Right here, right now I've got 30 people in the room with:
A strong unanamous endorsement complete with practicaly unbridled excitment, table pouding and fist pumping.
THIS is what allows me to say with complete confidence that this stock is not worth trading at all right now.
THIS is what allows me to say with complete confidence that this stock will be moving much MUCH higher, in ALL timeframes, short term, medium term, and long term.
And THIS is what allows me to say with confidence that there are people who are going to get very wealthy here.
So there you go. The analogy is there, and I hope it makes some sense to you. Just to finish here, I want to point specifically to a "few people in the room". Remember, all 30 are important, but these are ones that I think are worth highlighting right here and now.
1) This float is EXTREMELY tight. But this makes some sense. The severity of the huge drop last month shook out any weak hands, not to mention the continual decline of the share price the past year.
2) Adding to the tight float, Institutional participation would have been minimal. First, the company was in trouble forever, and secondly, the share price wouldn't allow them to participate as many have covenents as to minimum share price.
3) The reverse split was a GOOD thing. This now allows Institutions to participate, and with the GOOD news the company put out, Institutions will now be clamouring for shares. But this is in an environment where the stock is now EXTREMELY dry and where ALL of the Institutions were only at the starting line, owning nothing. So you have an Institutional rush now for shares, in a tight float environment. Doesn't get much better than that!
4) The historical perspective is very important here, and remains so. I did a post already on that, but it remains absolutely precient today and will for some time. That post, entitled "An Extremely Rare Opportunity Is Upon Us" can be reviewed by CLICKING HERE 5) I mentioned looking for people in the room who have opinions that are changing? Well BIGGEST among them is the person looking at the broader economy, and this person is suddenly a lot more positive. This is important, and certainly good news for Bombardier.
So I finish here and say it again. There is a MASSIVE rise still to come, and a LOT of money to be made in all timeframes. Grab the shares you want, sit back, have patience, and above all, seek to UNDERSTAND THE BACKDROP that creates and motivates a given price,
There will be fortunes made here.