down down, page-17

some good points in the reality check post, BUT it all comes down to due diligence and avoiding hype and also being realistic about risk.

An important reminder that I read today was that you can expect to fail 45% of the time. The trick is to stem the losses, and let the winners run.

BUT You won't make a lot of money by selling early on a decent stock.

See today's AFR on Karl Siegling the founding director of Cadence Asset Management which has delivered 14% pa for 5 years.

“Most funds are not set up to materially outperform the index,” Siegling says. “I don’t understand why people pay a fund manager 1 per cent just to hug the index.”

His investment theories have been shaped by his keen reading of investment literature like Reminiscences of a Stock Operator about Jesse Livermore and Peter Lynch’s One Up on Wall Street.

“The most important rule of investing is let your profits run, and cut your losses,” ­Siegling says. “You can’t have a 10-bagger if you sell the stock when it doubles.”

His first 10-bagger, a term used to describe a holding that increases in value 10-fold, was RHG Limited, which is essentially the loan book of Rams Home Loans that remained after the brand was bought by Westpac Banking Corporation.

His other winners include salary administrator McMillan Shakespeare and financial software provider Reckon.

Siegling nominates diversified financials company Firstfolio as a less memorable stock selection.

He bought the stock at 4.5¢ and saw it run to 7¢, but retained a holding all the way down to 1.5¢ and lost money.

Cadence tracks the win/loss ratio of its portfolio managers’ stock selections.

Perhaps surprisingly, given his track record, Siegling actually loses 45 per cent of the time.

“This means 45 per cent of my calls are wrong but they are hopefully small losses and by letting my profits run, the big returns come from the 55 per cent of my calls that are winners,” he says.

Everyone has a theory. The important thing is not to be led by others, but try to remain impartial and unemotional about a stock and continue to research and consider opinions objectively. Mostly though I look at where a poster might be coming from and what's in it for them by taking a particular view. If someone offers not much in the way of justification for a view it's is a bit of a warning sign IMO.

It seems clear the close drill distances are because AZS is proving up the Cascada resource so it can be easily added in accordance with the Promontorio project timeline and to the DFS which is scheduled for the 2nd half of the year. You can see how the projects are linked as part of the Promontorio project in slide 13 of the latest preso.

The certainty that this means will make raising capital or getting a JV easier IMO and the reason for needing that is obviously the much tougher conditions in the market right now. So industry standard of 50m is not really conclusive.

We can't all be geologists, and knowledge is often gained in the school of hard knocks. Yet looking for the logic in people's arguments is a big one. IMO prosperity is most convincing informed by knowledge of the mining process and commonsense.