We've seen the QIN share price fall from the mid $1.40's all the way down to 97c and back up to $1.10 over the course of a few days, enough to cause an emotional roller-coaster for any investor. So I thought I might put myself in a few different shareholding scenarios and work out what I might do; hopefully this might help anyone going through this upset
If I was a Short Term Trader (day/swing trading timeframe)
Holding stock: immediately get out, sell my entire holding. The share price is under previous supports, and any short-term reasons to hope for a bounce on my mid $1.40's entry price are now invalid. Take the loss and move on to the next trade idea.
Not Holding stock: hmmm, this might be an interesting trade. Massive short seller attack, millions of shares traded. Shorts need to get back in to realise a profit and there is a big gap back up to fill. I will wait on the sidelines and participate if we see a recovery rally gaining momentum.
If I was a Very Long Term Holder (+5 years investment timeframe)
In at much lower prices: I believe the Glaucus research note is not a valid investment thesis (https://hotcopper.com.au/threads/my...report.3317106/?post_id=23576856#.WNbSqPkrJhE). The apparent China customer problem appears serious (thanks tippy https://hotcopper.com.au/threads/china-govt-raids-office.3320475/?post_id=23616735) and poses some near term risk to further share price falls. But my entry risk level was when the company hadn't even completed a harvest, and my investment thesis on waiting for big crops remains intact. I could very well be wrong and end up holding nothing if Glaucus are correct, but on balance the share price fall is an opportunity to buy more stock below NTA.
In at much higher prices: Ouch this share price fall hurts! My investment thesis to wait for big harvests beyond 2021-22 is intact, but I will not want to put any more money at risk until these negative issues are properly addressed. Do nothing.
If I was a Medium Term Holder (1-2 years investment timeframe)
In at lower prices: Whilst this share price fall does appear to be more smoke than fire, I have a profit already and who knows what will emerge. I can always get back in if the share price looks like going higher. Sell my holding and then wait and see if it is worthwhile getting back in after the company provides commentary
In at higher prices: This is the worst scenario. There is plenty of uncertainty surrounding the company, but shares do look cheap. But I've also lost 25-50% of my investment and I'm worried I might lose it all. I could just get out and put the worry behind me. Or sell enough of my holding that any further falls won't make me worry any more. Or trust management will sort this out and buy a few more shares and average down. The big thing is I must make a decision that I will be comfortable with, as having to realise a loss on selling a stock is of almost zero consequence than to lose confidence in my investment process. On balance I would sell down half of my holding and grit my teeth at the capital loss and wait for some updates from management.
So all the best to everyone out there come Monday 10am!
QIN Price at posting:
$1.10 Sentiment: Buy Disclosure: Held
