Sideline observers: Be right, sit tight vs. opporty. cost?Very nice to see all FDR’s critical details being so well covered over on CEO.ca. Now I can focus on the less tangible aspects of these kinds of phenomena. Such as, what makes a person decide to chase a breakout?
Earlier I said the best source of new FDR buyers was people who had just crystalized profits in other penny juniors. A very close second ought to be other people still heavily “invested” in their own favorite exploration stories / metals. Now I realize, if you are convinced your particular gold / silver / lithium / unobtainium play is an underappreciated gem, it can be hard to jump ship. Especially if you’ve bet an oversized amount of your portfolio. And have been holding for a while. The sunk cost fallacy is real and deadly.
To these investors I say: don’t hate it when your fellow speculators are succeeding powerfully. Keep a flexible outlook. Rejoice at a new opportunity to potentially make some fast profits. Such gains would mean you could almost certainly re-establish (or even increase) your holdings in your original favorite. And if you have to pay a little more to get back in? Just a cost of doing business. But who knows? Maybe you won’t want to leave FDR.
Your current stance might stem from a small but vital misinterpretation of some time-tested wisdom. I think it was Jesse Livermore who said something along the lines of “be right, sit tight… being right actually isn’t too hard, but sitting tight is very hard as profits mount… yet the sitting is where the really serious money is made.” Good advice for riding a breakout, if you’re confident in the story. (Not that trading possibilities don’t exist in nearly every stock - just that catching them requires skill much rarer than the ability to spot a good story ahead of a breakout.)
But Livermore also elaborated that it is far more important to admit mistakes early so as to preserve capital - and freedom of action. And if you’ve been waiting patiently for your favorite stock to finally catch fire… that’s already a mistake even if the stock is holding steady. Because who knows what potential profits you are about to miss elsewhere?
FDR’s valuations are ultimately driven - and confirmed - by its drill results, but meantime, how does the near-magical collective intelligence / super-brain of our online discussion group play its part? It steadily pulls in more and more new investors, appealing to both their intellect and greed. Gordon Gecko was also right about “the most valuable commodity [being timely] information”.
Mind you, all of the above leaves out one group that is actually a better source of new buying than both of those above: existing FDR shareholders with paper profits. Which is 99% of them as of this moment. If our benevolent and much beloved Eric Coffin can publicly declare he has bought the breakout while already holding a presumably decent-sized position at $0.20 (with $0.35 warrants), small wonder other early FDR fans have been doing the same. And will likely continue to do so at an accelerating rate. And we aren’t even a marginable security (yet).
Being right and sitting tight is always easier when the exit decision will likely be made for you by buyout offer… and especially in a tight float situation where you yourself can play a non-trivial part in winning the war.