The article regarding iron ore share price was all over the financial news today, "China demand could send iron ore price up 30 per cent". Goldman Sachs JBWere commodities analyst Paul Gray said iron-ore prices will continue to rise until 2010 as demand outstrips supply. While it is certainly gave a big boost to Rio and BHP, there are few Iron ore producers, or even explorers that benefited from the price increase.
One of them is MGX. Just ten days ago at 18th of September, I bought MGX at $ 1.97 per share (I started watching it few days before at $1.85 per share), and now it is sitting at around 20% profit. I wasn't very lucky with ADY (Iron ore producer and explorer in South America) before. The share price was quite stagnant at the time of my holding, so I decided to sell on a loss to change it over to MGX. I'm very happy with my decision, although, ADY share price was also moving up after I sold them :(
Back to the MGX. One of the reasons I bought MGX is because it is a 'pure play' iron producer. I am trying not to buy pure explorers anymore (with the exception of DYL), because I've got burn in most of them before. The chart for MGX was also quite impresive, and apparently is good a value!!
E.L. & C. BAILLIEU Stockbroking Ltd., Macquarie Research Equities, and Merrill Lynch (int) rated MGX as a "BUY"
Penny Deadful Stocks
Looking back of what happened, I guess one of my biggest mistakes before the crisis was to invest on few 'under 10 cents' stocks. They had a great run for a while, make you greedy and want more profit, when it was suddenly experiencing a freefall. Worse thing was, even then, I still hoped that the price would go up again - yes, waiting for an anouncement! And you might have guessed that when the long awaited announcement came, the price wasn't even move.I paid dearly for the mistakes, but I guess it's all come down to learn by experiences.
As a new investor who do not subscribed to any paid broker, I relied my research on the chart and story of the fundamentals. What I didn't realise, was that in some speculative cheap stocks, there are so many manipulative actions taking place. Of course not all cheap stocks are bound to be manipulated, but id doesn't hurt to check everything before we buy. Bad decision could cause a good damage in our investment.
There are, of course, risks with any investment. But certain risks are greater with penny stocks. One of them is the risk of manipulation. Because of their nature, penny stock is easy to manipulate. After the brokerage firms acquire a large number of shares at a low price, they can manipulate the stock by creating an artificial demand to drive up the price. When manipulation occurs, the stock's price may not reflect the true value of the company, but rather the artificial demand created by aggressive marketing. The price may then collapse after the broker and other persons involved in the manipulation sell their shares.
Another risk is caused by lack of information about the investment. Unlike most large, well established companies, many companies that issue penny stock do not provide a sound data/ reports to the public. This lack of information about the company's operating history and financial health increases the risk to the investor.
The market price of such stock can be based more on the aggressive marketing of the selling broker than on the real value of the company. This sort of marketing can be found easily on the Internet listings or report on TV -- The fact that a stock is mentioned or even recommended on television or on an Internet Website is no guarantee that the investment opportunity is legitimate. Moreover, some television programs or reports are actually advertisements paid for by brokerage firms.
Note: The stocks that I own now, all of them are still under AUD 5/share. For some investors, maybe these are what they called penny dreadful. However, the stocks I meant to point out in this article are the listed explorers (resource) with share price of under 10 cents/share.
DYL - Is It Starting to Move Again?
Just when I thought that keeping a big proportion of my portfolio in DYL is a mistake, the share price is starting to move again this morning. It's been a really boring weeks for DYL holders lately. While most of my resource stocks were running, DYL price was hardly moving.
There is no new announcements so far, shall we expected them soon?
DYL's share price now is substantially lower than its peak a while ago, and while I managed to buy a few on 0.27 cps; I am still sitting on a reasonable loss now. For a junior uranium company, I think DYL is not too bad, just some highlights:
There is no new announcements so far, shall we expected them soon?
DYL's share price now is substantially lower than its peak a while ago, and while I managed to buy a few on 0.27 cps; I am still sitting on a reasonable loss now. For a junior uranium company, I think DYL is not too bad, just some highlights:
- $70M cash on hand
- Big drilling programs fully funded for the next 4 to 5 years drilling
- in Namibia (apparently the safest country for mining Industry in the world now- beating Australia) and Mt Isa
- PDN has 15% stake and also the supports its director is giving to DYL
- Directors invest big money in the business
After an impresive run of PNA, OXR and MGX in the past few days, I wish today is DYL's day!!
Go Yellow Go!!!
In Pursuit of a Family Home
The credit crunch in America actually give me a hope that one day, there will be a housing market crunch in Australia too.. Don't get me wrong, it will be a pain for a lot of families - and I feel sorry for that, but at the same time, it will give us a chance to be able to aford a house at decent price. Afterall, housing is one of the most basic needs for human being!! Now, housing price is really ridiculous, and with three small children you have nearly no chance to get a rental property.....
Reading in The Australian today, I saw an article: US house prices suffer biggest fall
Maybe just need to be patient, and meanwhile, invest your money somewhere else.
Reading in The Australian today, I saw an article: US house prices suffer biggest fall
Maybe just need to be patient, and meanwhile, invest your money somewhere else.
Ex Dividend Date
Industrea (IDL) is going XD today. And the share price went up 1% at the moment I wrote this.
The same thing happened to Oxiana few days ago, on the day it went XD, the price was going up. Usually, price of the stock will drop approximately by the amount of the dividend on the ex-dividend date. So I suppose it's nice, to get the dividend as well as the increase in price.
Does this mean anything at all?? I hope it's a good sign..
The same thing happened to Oxiana few days ago, on the day it went XD, the price was going up. Usually, price of the stock will drop approximately by the amount of the dividend on the ex-dividend date. So I suppose it's nice, to get the dividend as well as the increase in price.
Does this mean anything at all?? I hope it's a good sign..
Just Few Things to Consider
I have these things in my mind for the past few days:
- Subprime Crisis not long ago
- ASX in a new record high
- Gold Price
- Oil Price
- US-Iran War
- US Recession/ Depression
And how about us in Australia? This morning I read quite interesting free newsletter on my email. The title was "Money Goes Where It's Treated Best" by the Daily Reckoning Australia.
I can not paste the full article here, but basically they reckon that the cut in US rate by the Feds, gave us more than a lift from the continual stock market crisis. By lowering the rate of return on US bonds, Bernanke has made a massive shift in global capital flows. A shift in global capital flows away from America and toward (one of them) Australia. There you go, so we've got our record high again.. Why would you invest in America, while you can invest in Australia for less risk, with higher capital gain??
So, is this mean the ASX bull run will continue for a while? Just wait and see, I suppose
In a New High
Yesterday, the ASX started the week with a record high, up 93.6 points to 6451.5, beating its best close of 6422.3 points on July 24.
For myself, it wasn't a bad day either.. Most shares in my holding went up, giving me a sweet smell of profit for a chance. I think I know what the word 'vollatility' is like now.
Today, the record is broken again. With the strength of metal price, all my shares are in the green, with MGX (Mt Gibson Iron) and BPT (Beach Petroleum) as the best performers...
Oxiana (OXR) wasn't bad either, this stock has increased around 18% this month alone.
It's very exciting, but I also started to get nervous and genuinly thinking to take profit.
For myself, it wasn't a bad day either.. Most shares in my holding went up, giving me a sweet smell of profit for a chance. I think I know what the word 'vollatility' is like now.
Today, the record is broken again. With the strength of metal price, all my shares are in the green, with MGX (Mt Gibson Iron) and BPT (Beach Petroleum) as the best performers...
Oxiana (OXR) wasn't bad either, this stock has increased around 18% this month alone.
It's very exciting, but I also started to get nervous and genuinly thinking to take profit.
It Was OK!
I am having a very good run on few of my shares this week. Oxiana (OXR) seems to get back stronger, while Industrea (IDL) and Pan Australian (PNA) have also been in the rally as well.
I am not really sure what to do with Mount Gibson Iron (MGX). I guess I was in a little late, just in time for others to take the profit :(
MGX's share price increased 8% just a day after I bought it, but then it started to come down again (around 6% in two days!). To make it worse, one director just have sold 500,000 shares in the market.
I am not really sure what to do with Mount Gibson Iron (MGX). I guess I was in a little late, just in time for others to take the profit :(
MGX's share price increased 8% just a day after I bought it, but then it started to come down again (around 6% in two days!). To make it worse, one director just have sold 500,000 shares in the market.
Get Back on One Feet (or Not)
Two months have passed since my last post. This is to say that I haven't posted any single blog during in a period when 'subprime mortgage' became a most infamous phrase in our financial world.
Truth is: it was painful!! As a fairly new investor, I got caught in the middle of the crisis, unsure what to do, and (hate to say this) I panicked a bit. I guess one of my mistake (among the others) was that I held a few species. Speculative stocks were among the stocks that were hit the most during crisis. Another mistake was that I wasn't too discipline on my plan. I was sort of in a hope that "the situation will get better tommorrow"(well, it wasn't).
I was down to nearly half the value of my holding when I started to realise that the crisis was going to stay. I cut all my species for a loss and started to invest on better and stable stocks. Thanks God, I was able to gain again to offset my loss. Now, I am more or less in the same position to where I was started.
Now I am holding: BPT; DYL; IBA; IDL; MGX, OXR, PNA, REX
(Some of them are still painful, but I won't turn my paper lost on them into a real one, just yet!!)
Truth is: it was painful!! As a fairly new investor, I got caught in the middle of the crisis, unsure what to do, and (hate to say this) I panicked a bit. I guess one of my mistake (among the others) was that I held a few species. Speculative stocks were among the stocks that were hit the most during crisis. Another mistake was that I wasn't too discipline on my plan. I was sort of in a hope that "the situation will get better tommorrow"(well, it wasn't).
I was down to nearly half the value of my holding when I started to realise that the crisis was going to stay. I cut all my species for a loss and started to invest on better and stable stocks. Thanks God, I was able to gain again to offset my loss. Now, I am more or less in the same position to where I was started.
Now I am holding: BPT; DYL; IBA; IDL; MGX, OXR, PNA, REX
(Some of them are still painful, but I won't turn my paper lost on them into a real one, just yet!!)
Technically Speaking
At the most basic level, a technical analyst approaches a security from the charts, while a fundamental analyst starts with the financial statements. Technical traders, believe there is no reason to analyze a company's fundamentals because these are all accounted for in the stock's price. Technicians believe that all the information they need about a stock can be found in its charts.
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