looking sick, page-11

That's a pretty specific prediction in a market like this! Wish I had your crystal ball. LOL

I think you're right to be glad you didn't sell though. In my experience, when every opinion you read is negative on fairly well known companies like this, that's exactly the time to get in.

Example 1. A couple of months ago you would have thought Bluescope were nine tenths dead and buried from the threads on Hotcopper, and the share price hit 64c. A buyer willing to bet against the herd could have sold out at 90c not long after.

Example 2. Billabong got justifiably savaged, but sentiment was so unremittingly negative that the price overshot and hit $2.81. A strong minded investor focused on the double digit dividend yield the sell off created, could have creamed off that fat dividend and still sold their shares for $4.30 a few weeks later.

Example 3. When the main man quit Nexus Energy a couple of months back, the knives came out in force and the shares plunged to 11c. An investor who ignored the death notices could have more than doubled their money in just a few weeks.

I could go on, but suffice to say that it's rare to make money long term in the sharemarket by following the herd. If you always believe prevailing opinions you will tend to buy high and sell low.

I bought ERA at what I thought was a good price and they have gone lower. Opinions have got even more bearish. To me that makes them more attractive now than before, so whilst I am cautious about averaging down in stocks, if the alternative is getting badly diluted then it's a no brainer. I took up my rights and will be holding all stock.

There are actually a number of things that could see ERA rise significantly.
1. Markets turn up again.
2. A change of government.
3. Rio move opportunistically to take holders out.
4. Several brokers switch ratings due to downside price target being hit, or large broker releases a positive recommendation.
5. Selling turns out to have been driven by CR logistics and dries up.
6. Positive news of any sort from the field. (Floodwater related, exploration, native title relationship, etc.)

At this dark moment it seems impossible that anything good can happen, but that is typical when stocks are at the low end of their cycle. History shows that big players like ERA often show unexpected resilience.

A few days ago on the Qantas thread here it was all death, doom, dismemberment and despair as they went into a trading halt. Some were predicting a price of under a dollar when the stock recommenced trading. I placed a big buy order at $1.20, hoping to exploit the panic. The stock opened and I never got close. It actually went UP!

If ERA drop further in the coming days, my bet is they won't stay that low for long. Just an opinion, but at least my money is firmly where my mouth is.