What is happening now in the mining stock world?
I think there is a variable here few are talking about; and I think it is the primary variable and should be pointed out.
Too many stocks are zipping straight up. Most people are attributing it to this stock for this reason or that stock for that reason.
I think that is wrong: as Marshall Mcluen said: "The medium is the message". And the medium here is SPECULATION fever.
Stock after stock, is breaking out for all sorts of reasons and their charts look identical, while fundamentally solid plays like MMG, BWR, HBM, SLW, K,etx sit at the same price.
So this means, in my opinion, two things:
1) There is a speculation fever and one is sort of forced to ride these rockets if they want to make big gains.
2) It is also a very dangerous game to play, but one I think seasoned people have to consider.
Now the irony here is that I am convinced a quantum leap in metals prices is necessary to supply the world demand for base metals, so we may not have a crash per se. This just may be part of the necessary rise in prices the market is realizing it needs, to open up tier two deposits.
Still, why is the market realizing it in some stocks and not others. I think it is primarily the momo players moving from stock to stock. Like me-lol. Probably when all is said and done most of the quality plays will make these big moves.
But for now, the big money is going to be made anticipating the next market favorite.
So while I think one has to engage in pre momo-lol and momo plays, they also have to understand its dangers. I have been hedging myself by taking profits every few weeks. Which is hard to do as there is always another stock I want to own.
Another trick I use is to take the profits from the rockets when I feel they are starting to flatten out and go down and pick up new juniors. Like some of us did moving LBE profits into FNI.
And another thing I am planning to do is plow rocket profits back into solid producing mining companies like Hecla, Coeur, BWR or HBM.
So while I think it is foolish not to recognize and play these numerous rockets, one also has to be very careful because they can fall as fast as they rose. |
