Then and now;
Again we got it wrong. We did not expect the stock to move much above $105 in the B-wave. Having said that the wave count itself still looks to be just fine so we would expect, at the very least, that the doubling in the last year will be completely retraced and then some. Most other technical indicators , such as RSI and MACD more or less confirm this. The p/e was close to 24x, pretty rich for this kind of industrial company. For the gutsy types this may be worth doing a put on.
This company has strong financials, robust prospects and is situated in one of the most promising mining areas of Columbia, right next door to Ashanti (AU) and Seafield (SFF.V). Had you invested in 2008 when this company started its life in this form, you would have been very rich by the time the stock peaked in March of 2011 at $6.50. Had you bought then you would now be very poor. This is what is known in the market parlance as timing. You will always be told that timing the market is a fools game that you should not indulge in. We think that you are being foolish if you don’t.
At 9 cents this thing is down about 98.5%. It is instructive to recognize that , despite that, the stock can still easily drop another 50%. This is financial math that is different from normal math. But if there are fundamental reasons to believe that this stock has a viable future, than buying low and selling high, that is timing the market, makes a lot of sense.
It was half a year ago that we latched on to the Footsie as one of the most “expressive” indices , that had completed a very clear 5-wave down movement. The A-B-C that follows is essentially identical to the much larger A-B-C B-wave from the March 2009 lows. So far, despite retracements reaching almost 100%, these patterns have not negated the larger notion that the FTSE started its bear market back in May/June of this year. So, if it is not broken, we will not fix it and just wait to see what happens next.
Then and now;
It took a little while and on Aug. 31 we were a little early but here we are some $50 below the sell point and there is still a long way to go.