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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: JoeBarry9 who wrote (60273)	8/31/2006 12:51:21 PM
From: zoo york	Respond to of 313137

Hi JoeBarry! Well I think any qualified financial advisor would say we are nuts, but I think you are doing well. I was more than 25% of my entire PF weighte to CS myself a while ago, but now it is closer to 10%. Not because I have sold, and in fact I have been buying a lot more this summer, but because the stock pulled back so sharply and a couple of my other juniors have made huge gains to swing the relative weightings. I tend to believe it makes sense to overweight a PF with one or two stocks, and CS is a good candidate because so much of the risk is out of the picture. The resource is already proven, the recovery plant is in place and refurbished, and the company has solid cash in the treasury to survive any downturn. Also, the ore grades are very good and the operating costs are low enough that CS will remain profitable even if we do get a long decline in metals prices. So there is a lot more staying power in this company to ride out a big chunk of your PF. And lastly, it has already gone through a sharp correction, which does not mean that it cannot fall further, but at least you can have far more confidence in riding a stock that is near the bottom of its range, than if you were sitting on huge paper profits in an overbought situation. cheers! COACH247

To: JoeBarry9 who wrote (60273)	8/31/2006 1:45:24 PM
From: TrueScouse	Respond to of 313137

jb: <<I have a massive amount of capstone - in fact, 30% of my net worth. Yikes, am I nuts?>> Not nuts, but maybe a little unwise? :^) I also like CS a lot, but it's only about 2% of my PF. None of the stocks I own are more than 10% of my PF, and much less as a percentage of my net worth. I remember the Manhattan Minerals (MAN) fiasco too well to ever put too much into one stock. And scams such as IPMCF. I also remember talking to an investor who held 200,000 shares of Bre-X -- and never sold one of them. Expensive wallpaper. Ouch! IMHO it's important to spread your "resource stock" funds across different sectors (PMs, BMs, Energy, Gems, etc.) -- not necessarily in equal amounts. For example, my Resources PF is about 60% PMs and 40% covering all the others. You should look carefully at country-risk as well as individual company risk. You should also try to diversify amongst the different types of juniors -- producers, developers, "resource in the ground" and pure explorers. Anything can happen -- natural disasters, change of government, collapse of the price of the underlying commodity, scam, local opposition to a mine, mismanagement by the company, etc., etc. On these boards we've seen examples of all of these over the last 10 years. So, as much as I like Capstone, my friendly advice would be to use any "pops" in CS to reduce your exposure and put the freed up funds into some other stocks. Zoo York has suggested some excellent ones, as has Claude Cormier. Best regards, Howy