Hello Trilobyte,
"Unfortunately, however, [BSP] hasn't performed well at all in the last few weeks ... Not always easy to be patient with these "unknown" stocks that are so thinly traded."
I only really started investing in stocks a few years ago (ie I dumped all my mutual funds), but I think if there's one thing that I would like to think that I have learned is that it really does pay to be patient :). In the Laurier investment club that I'm in, we've returned close to 40%+ in this past year, but the funny thing is, that quite often times, we lose money initially but then when things happen a few months later, we're rewarded quite handsomely for our patience.
Ergo, I'm not too worried about BFX, BSP, or a few other stocks that I'm in. I think if BFX has shown anything, it is that it really does pay to be patient -- for the longest time (I think a month or two) it was sitting a chunk below my initial purchase price of 1.45. If anything, I look upon these drops as blessings -- as long as you have cash flow, you have an opportunity to buy at something of a firesale. Hey if the fundamentals are great, and the stock is a bargain at a given price, it should be better bargain if it drops further :). I like thinly traded unknown stocks the best because the probability that you have found an undiscovered gem are so much greater - but they also require you to do more research...
We have a faculty advisor for the Investment Club, who basically only buys thinly traded unknowns -- it's almost uncanny the precision to which he picks 'em. Our running joke is that he tells enough people that it actually moves the price. But seriously, his investments have been quite rewarding. I'm not sure where he finds them, but an idea that he gave in the spring was a company called synergistics that we first picked up at about $5-6, and then after continued improving fundamentals, we bought more over the summer, then in the matter of a few weeks, it skyrocketed to $22 after it was bought out :). Synergistics was a boring company (they made plastics -- the coating on wires), thinly traded, had improving fundamentals... Then there's Orbit oil that we sold a few months ago. The fundamentals were all there, but apparently the word on the street was the president/ceo wasn't well liked by the investment community, so despite improving fundamentals, it lagged the market -- then lo and behold there is a takeover attempt for the company on the table. We were just too impatient.
My rule of thumb now is that if I can't afford to wait several years for my investments to blossom, I shouldn't be buying stocks.
Clement |
