Musings on Investing

Corona-virus Hysteria

Winshear Gold, etc.

The volatility in the stock market shows that hysteria has set in. What is happening in the market would have been a rational response had the stock market simply fallen. But during the same day, many stocks fall 30% and then go up 70%. Spreads have increased, and buyers disappeared. Those who are using margin in their accounts must be suffering hugely. There is no valuation in the market. People are selling whatever they can.

Value-investors are buying at a much lower price than they originally planned to. Over the last year, my respect for East Asia has grown. And I am more bullish on China than ever before:

On Investments…

In my earlier musings linked here, I mentioned several stocks that I said, in my view, offered an excellent upside. Since then, they have fallen ~30%. Apart from those names being still valid, here are some more:

  • Group Eleven (ZNG; C$0.02)
  • Norra Metals (NORA; C$0.015)
  • Strongbow Exploration (SBW; C$0.03)
  • Winshear Gold (WINS; C$0.05)
  • Harfang Exploration (HAR; C$0.16)
  • Aston Bay Holdings (BAY; C$0.035)
  • Globex Mining (GMX; C$0.25)
  • Eastmain Resources (ER; C$0.065)
  • Condor Resources (CN; C$0.035)
  • Commander Resources (CMD; C$0.05)
  • Riverside Resources (RRI; C$0.105)
  • Balmoral Resources (BAR; C$0.23)
  • Kairos Minerals (KAI; A$0.006)

I like to remind myself that:

  • When I chase a stock, I unnecessarily leave money on the table for those eager to sell to me. I should always give limit orders.
  • Giving stink bids is the way to go in current volatility. I should not bid more than the lowest price of the last week.
  • I have no way of knowing when the market bottoms. It is only in retrospect that you can claim to see forward using the charts. I have never met anyone who successfully makes money using trends, charts, and other funny stuff.
  • As a corollary to the above, there is nothing like “a falling knife” in the stock market. You cannot know when it has stopped falling.
  • Value-investing is the only way to invest. When you invest based on any other methodology, you are being superstitious, anchor-less, adrift, and slave to your emotions and peer-pressure.
  • I should always have a buy and a sell price. If you don’t have either, you are likely not making an objective decision.
  • I make the easiest money when I think for myself. If I make a mistake, I prefer to blame myself. That is the honorable thing to do, rather than to blame others. This is also the only way I can build my competencies and confidence.
  • I read the Bible, and rein in on lust, greed and fear. These sins warp my perception of reality.

Warm regards,

Jayant Bhandari

Associate: Rajni Bala

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