TON (ASX) Blinkered Delusion

Originally posted by knuckles ↑

The TON thread reminds me a bit like the PEK thread around 2011 except that there was far less agression. PEK was one of the hottest spec stocks around about that time rising from around 10 cents and hitting 97 cents. At the time the rare earths market was super hot with Lynas (LYC) and Arafura (ARU) trading around $3 and $2 respectively. PEK was reporting excellent results from its Tanzanian projects.

There was some excellent analysis occuring on PEK at the time and the long term holders were talking about a $1 party in Perth. Some of that analysis indicated that PEK's results were showing resources which had value of around $30 billion. Many were confident that PEK would hit $5 in a short time frame based on its low market capitalisation in comparison to LYC and ARU. The results alone surely were going to underpin the share price rises at the time.

Unfortunately PEK retraced from a high of 97 cents and within 6 months was below 30 cents. It than surged back over 60 cents before continuing a downward spiral to under 10 cents today. They still have the massive resource, unfortunately rare earths is a little on the nose, a quick look at the LYC chart tells you the rare earths industry is a tough one.

I held a very large parcel initially in PEK from the teens to the 90's while also trading another parcel on the way up, but ultimately giving up most profits as PEK continued on a downtrend and now I am totally out of PEK.

My experience with PEK and many other speculative shares has taught me a few lessons which I have used to trade TON over 20 times for fairly good profits. Some of the major lessons include:

. Do not fall in love with a stock.
. Have a strategy in place with your purchase including a target and a stop loss.
. Don't be afraid to leave some profit on the table for the next investor when you sell.
. Take profits off the table regularly.
. Spread/diversify the holdings.
. Try to see both sides of the argument.
. Recognise that there are some excellent posters on Hotcopper and also recognise that there are sharks, but mainly that most posts are acting in their best self interest. Self interest is acting in the way that is most personally beneficial. Adam Smith, the father of modern economics, famously explained that it is possible to achieve the best economic benefit for all even when, and in fact because, individuals tend to act in their own self-interest.
. Recognise liquidity and how it particularly affects the speculative market. In the current bull market there is plenty of liquidity/volumes to buy and sell but if the market turns bearish watch the volumes disappear.
. Recognise the graphite market is hot but then so was the internet boom in the early noughties, and the rareearths boom and the uranium boom and the gold boom and the tin boom. Most of these booms come and go. Some analysts are saying that zinc may be the next boom industry based on supply and demands. That is, most zinc mines have closed in recent years because of low prices and oversupply. Now that supply has tapered off the zinc price is starting to rise again.
.Research as much as possible using a combination of technical and fundamental analysis and encourage debate from both sides of the fence. It is better to understand all the rewards and risks. And if you really want to read some top analysis have a read of the daily XJO thread. The guys and girls on this thread will very often tell you where the markets are heading based on technical analysis.

Sorry about this post waffling on a bit but just wanted to add my little bit seeing as everyone else has had their 2 bit worth.

In summary, I really like the TON story having been in and out over 20 times, however, for me I have seen speculative shares rise and fall so now lean towards smaller profits but even smaller losses. Each to his own.

Finally, I've found in life that its easier and better (self interest) to be polite, friendly, positive, encourage but still have a voice. That's what HC should be all about.

Expand

Great post Knuckles.

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(20min delay)
Last 1.0¢		Change -0.001(9.09%)		Mkt cap ! $15.68M

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1.0¢	1.0¢	1.0¢	$3	331

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