stupid, more stupid, most stupid, stock market investors :-)

addendum december 27, 2012: stupidity is not a singlei investment issue, you know? when in fear (or greedy) investors/traders drive many markets in the same direction at the same time ... just look what happend today after some unimportant economy confidence analysis hit the market today ... pure panic :-(

~~~
my silver miners from idaho, Coeur d'Alene Mines Corporation (CDE), missed some stupid analysts expectations, reported a loss of $15.8m for the last quarter ... so far so good ..

what did the markets today?

5 days trading range + volume

hello, the company lost $15m, the stock is down 20%, the market cap is down $400+ million => hello again, mr. market? btw, that's the corresponding news release

stupid, more stupid, most stupid, stock market investors ??? please wake up, my dear homo sapiens financialis and yes, please start thinking for yourself ...

well, let's bet that this downturn is a little bit too much for a small 3Q loss for a still profitable company (on a yearly basis) and let's buy few shares tomorrow :-)

addendum, day #1: well, i've got some CDE shares on market opening at $24.69. the stock increased +8.17% today, the closing quote is $26.07. not bad for 1 day, if you asked me. what do you think, my dear mr. market? who was right and who was wrong yesterday? hmmmm :-)

same issue, different story ~ why i don't like investors/traders :-)

life cycle of the typical mining stock

source: Zimtu Capital Corp. = one of my portfolio companies. btw, zimtu's strategy is to enter the opportunity before the IPO ;-)

folks, mining is soooo exciting, u know? wanna read abt my investment approach?

1.) how 2 choose stocks 2 buy? 

a) well, i follow the markets daily and i also attend a lot of commodity oriented events like the precious metals fair, other (smaller) commodity shows, investor lunch events for few (approx 10 - 20) invited folks and the like. leftovers is easy, i buy stocks i liked most  ... my decisions are based basically on my impression or personal criteria like e.g. company's partners & investors [when folks like rob mcewen, eric sprott, paulson, soros, silver wheaton, pan american silver, xstrata and the like are also invested i believe its almost risk free 2 get involved myself ] ... i dont look-up the company website, financial news, earnings reports and the like at that stage ... of course, im easy 2 impress i think ... after the 1st small 'pilot' buy i subscribe companies newsletters, start following their development and if appropriate i increase my positions 

b) my 2nd decision method: i scroll down my portfolio sorted descending by current position value and where my eyes 'stops' thats the stock i increase my holdings in ~ ie intuition again 

2.) most potential for long term gains?

i think its the explorers & junior mining stocks

3.) why explorers & junior mining stocks?

well, this one is the easiest one! its based on the 'life cycle of the typical mining stock' [~ idea => IPO => discovery => a looooong development period i.e. the 2nd chance 2 buy these stocks cheap => production & cash-flow & dividends = the boring fat cat phase of stock's life] 

cheers 

btw, wanna look-up the mining ABC issues?

ps: ist there any risk involved? yep, of course there is a huuuuge risk involved: the discovery isnt good enough (too low metal grades, too small overall amonunt of the commodity contained, etc), mngmt not able 2 raise enough money 2 build-up a mine, legal/environmental issues, political risk (congo, ecuador, venezuela, russia, ...), management failure, sometimes even pure fraud (eg the only 'asset' is an advertising/promotion campaign), drop in commodity prices so that the production isnt economical anymore and a lot of similar stuff ... well, thats why i own 100+ mining companies and tend rather 2 increase my existing positions in the good ones than 2 buy a new strongly promoted company, u know?

anything else? hmmm, probably one famous quote about the gold mining industry / stocks:

gold mine is a hole in the ground with a liar at the top ~ mark twain