stockhouse.com;
A post from SH that I found helpful:
Independent traders, however, ought to understand that the risks of trading assets in Venezuela are not too different than trading shares of Fannie Mae and Freddie Mac. There is a risk in everything. It’s just that there is a very high risk premium attached to foreign situations because of U.S. politics.
As I see it, however, the difference between perception and reality is the place that traders make most money. So, I am not scared off by the current politics involving Venezuela and the U.S. But I understand, and accept, that many of you are.
As I wrote earlier today, I expect that should Ecuador’s Correa win the first round of their national election, he will be joined by Venezuela’s Chavez in more bad-mouthing of the U.S., and this will knock down the share price of Crystallex even more. To me, that’s the time to buy more.
Capital markets are full of surprises, but if you think it through you will likely come to the conclusion I did many years ago, which is that storytellers have set up the audience for surprise. Like a detective story or a Hitchcock thriller, it’s up to the audience to figure out what’s really happening, and to play the game.
I think you’ll find that the risks are not as much as you perceive and the rewards are much greater.
To play the game, just understand that the players with the biggest stakes have the best info, but they have to move those big positions in and out of markets, hopefully without us watching. Volume usually is an indicator. Sometimes the securities rules and regulations, such as the disclosures related to private placements, cover up the big moves.
That’s why you and I need to talk. The more we do, the more we learn, and the more able we are to manage our risk. Opportunities are a dime a dozen; risk management, however, is the bottom line to portfolio success. |
