Does your thesis hold up? Share price weakness could be a buying opportunity
“From time to time, I have added to positions like this,” Rule says
“In 1998, I remember being out at Diggers and Dealers in Kalgoorlie, searching the end of the world for bargains.
“I remember being very interested in the uranium business because everybody else hated it, or just didn’t care.
“And in 1998 in Kalgoorlie, I ran into John Borschoff from $1.5m market cap uranium stock Paladin.
“An unknown company in a hated commodity, led by a passionate, driven human being.
“After a short discussion I did a 10c per share financing for them, with an attached option at 15c. My genius was rewarded with the stock going from 10c, to 9c to 8c, and so on.
“Suffice to say, a year into the investment my 10c piece of paper was trading for 1c, meaning that I was down 90%.
“I revisited my thesis as one must do when one’s faith is tested. I found, frankly to my surprise that my thesis was very much intact.
“I still believed I was right, and that the market was wrong.
“I was able to buy some more stock at 1.5c, and six years later that stock was trading for $10 a share.
“The truth is that Paladin was substantially more attractive at 1.5c per share that it had been at 10c – and I liked it at 10c.
“If you like something at 10c you better love it at a penny.”