@nathanjames26 and
@Savingslowly, really great responses that go the heart of what is happening here. You’ve both illustrated the emotional engagement that comes with this stock and the consequent problem of over-trading with massive position sizes and putting all ones hopes and dreams into a single speculative stock that’s never made a profit. With such emotional investment and big positions (and intuitively if not consciously understanding it’s a fragile investment in an early stage business), people get protective and attack someone who just wanders in to the forum and starts pointing out some flaws.
But is falling in love with a stock a good investing or trading approach?
People are drawn to these specs not just by the underlying business story, but by activity – in threads, in share price moves, in regular announcements and it’s exciting and engaging. Its part of why I’m confident my charts will play out correctly here. When the hype dies down and the thread activity slows and regular announcement get fewer and fewer whilst the company gets on with the hard grind of trying to build a business, the energy will come out of the stock price and it can languish for long periods. It’s occurred with many similar hard-running Hot Copper specs that we see time and time again on this website. But this points to a more subtler issue.
These massive spec runs (in this case 2cents to 16cents or 800% in just ten weeks), don’t just happen by accident. There needs to be a strategy behind it to promote the stock. I know how I would do that but I don’t want to go into it here. I have little knowledge of what’s happened specifically with NOR and I’m not making a critique of anyone associated with that business, it seems a really good app and I hope it succeeds, so don’t shoot me for attacking your baby. I’m talking about share markets here as an analyst and I’m just making the point that when I see so much emotional investment in a stock that makes it easy to distribute shares to people at high prices, the sceptic in me assumes that there’s been some promotional activity by someone to get things to that point. Rightly or wrongly that’s the healthiest way to approach these specs for your bank balance.
By the way my current read of the action, based on both share price performance and the level and content of HC posts, is that a major distribution was successfully planned and executed yesterday around the patent announcement by a large investor, with further follow through today. It might have been a sell down of the escrow shares that were released last week but I don’t know much about these other than the headline announcement.
@nathanjames26, “”if this falls I’m going to jump…”. Ok Nathan, when you said that the other day in a post you were maybe being a bit light-hearted with your comments, but I’ve happened to notice a few of your posts and it’s a bit disturbing. Because you took the trouble to respond to me I’m going to say some things directly to you, that are meant with the best intentions. You need a bit of tough love mate and I hope you take this the right way.
The ASX is a secondary market where we all just exchange shares amongst each other. It’s just that some players are sharper than others and things are not always what they seem on this anonymous forum. Your posts read like you’re the new guy who arrives in town and sits down to play poker with the nice old-timers sitting in the café and before he knows it loses the lot and doesn’t even realise he’s been had.
I know you won’t listen to me, you’ll think I’m a “down-ramper”. But I feel better if I at least try and maybe somebody else reading might benefit. Don’t trust anyone on this forum, particularly those who agree with you and reinforce whatever biases towards a stock you may have. That won’t help you. Trading shares is a difficult game where you need to constantly test your thinking. You need to be listening to the people who disagree with you, to try to understand their perspective and use that to strengthen your understanding of the game here.
My sense is that you personally have too much invested into what is a speculative stock that hasn’t yet made a profit. That’s the core piece of fundamental analysis you need to start with when investing in NOR. Even if the best business minds in the country thought this business was going to be a winner it can still be a long, hard road to success for an Australian company in an ultra-competitive worldwide marketplace. There’ll be plenty of time to top up once evidence eventually comes through of earnings, but in the meantime the shares could linger for a long time at half their current price once the noise and excitement generated by the announcements and any promotional activity dies down.
You know, you have a great asset with you to help test you’re thinking on your investment here: your wife! Us men are all ego, focus too much on reward over risk and have a natural tendency towards over-trading in the share-market. Women have a better mentality for trading. There’s far less ego and they naturally focus on risk ahead of returns. You should sit down together and stress-test your investment here. Just hypothetically, what if the share price went to 4 cents or even 3 cents would that make you uncomfortable? If that would hurt, then you have too much invested in this stock. You need to adjust your position size to an appropriate level for a spec stock. A level that won’t hurt you too much if it turns out later that I’m really not trying to manipulate you and that my views on this stock are more right than yours.
Always allow yourself a bit of room to be wrong in the sharemarket and still survive to trade another day. The market will always be here. There are opportunities every day, week and year. You don’t need to go all-in on your one big idea or fear missing out. Just be happy with a modest investment and a good return when investing in any spec stock, instead of shooting for the moon.
Hope you at least pause and reflect. Good luck.
So ends my sermon for today!!.
(20min delay)