abu or current producer if you are a gold bull, page-58

Gold digger I couldn't agree more.
In this sort of market and especially if your not an experienced trader, don't invest more than you can afford to loose. Simple.
KGL always had the element of political risk. It seemed an acceptable risk but suddenly the risk became more obvious.
However its price drop is only in line with the drop in most large gold producers so despite what its been through its held up remarkably well.
The danger is buying stocks that the crowds have bought.
AZM was all the rage at 80c and now its 15c.
NAV 30c in 2008 and now raising funds at one tenth of a cent.
RMS 1.80 to 45c. The list goes on.
KGL probably held up much better because it was never overvalued or even close to the NPV of the FS.
ABU is the same here. Its far from fair value especially if allowing something for exploration upside so it should not fall nearly as far. I know it has halved from 8c but it got to 8c without even a jorc resource at OP and in any case it too is not doing any worse than the producers.
I think that's the trick.
Don't buy anything that's not very good value especially if it seems every man and his dog is buying it.
Look for under the radar value.
Even the best of companies can turn sour and the little guys are always the last to find out why.
Bluescope steel, 2008 $12.50, now 28c.
QAN $6 to 1.04.
So don't think you are safe with the big stocks either.
What I like about stocks like ABU is the simple business.
A small company with one very good asset that I can easily put a value on MYSELF. I never like to rely on other analysts.
What hope have I got valuing QAN or BSL?
Too big too complex- no hope.
therefore what advantage do I have over the market.
None and in fact a big disadvantage.
What hope do I have at being ahead of the curve with those stocks. The instos will know long before me if the business is turning bad.
Not so with a small stock like ABU.
Even the most undervalued stocks though can get dragged down in bad markets as I'm sure we all know.
In this market you want to be in stocks that should be able to survive pretty much anything and prosper.
For ABU, very low capital needs and very low cash costs mean it should not only survive a bad market but it should prosper.
Yes there are always risks.
Nothing is ever 100%.