powpow.
That would be the case in the abscence of expected news or announcements which in the case of both fdl and gda,they both have qurterly reports coming in the next week which will keep the matkets abuzz for a couple of weeks afterwards.
Depending on the clarity of the exploration programs identified in their reports,they have updside rather than up and down side in a volatile market.
But then again, the volatility is not based on anything other than human investors following media reports that...."markets are expected to fall today....." etc. The media says this or that and most investors in the current volatility follow like sheep to the slaughter.....they do not question the fundamentaly strong position of 90% of the excellent blue chip companies and they sell their stock at reduced prices. unily enough,someone is buying the stock at the low prices and they are the one's who make money in a volatile market. They buy on the lows, sell on the highs. The people who sell into the falling market then buy when the rices have improved again.......doh, who is advising them ? It never ceases to amaze me.It is just amazing,why don't they sell when the market is high and their stock is worth heaps ? No, they wait tillthe media says on the morning news, "the dow is down 300 or 40 points and the australian maket is expected to face massive losses today..." ....and so they sell.....dohhhhh. Why ? For no inteligent reason, they sell into the falling market, and it's only falling because everybody is doing the same.....doohhhhhhh.
I n the case of Flinders, before the sell off, when the price was about 11c and after it when the prices recovered to about 11c , nothing changed.....nothing before , nothing during the sell off (when it went down to 7.6 c or what ever and nothing after the recovery in price. Why did people sel? Because they listened to media people who know nothing about the underlying value of each stock. Peoplesoldbecause other people were selling, der, right, that really has logic doesn't it.
What people should be doing when everyone is selling is buying......but they don't , they sell.
And as I said on one of the Gondwana threads, when people are selling in volatility, I am buying.....it is the most wonderful opportunity to buy really good undervalued stocks like fdl and gda at an even cheaper price and when the stock recovers its short term loss in price I sell, if I already have sufficent exposure in a stock like fdl or gda. Otherwise I add the cheap purchase to my portfolio and hold.
Will fdl go up and down in price during the next 6 to 12 months of volatility, yes. It shouldn't, but it will because of human weakness to what they perceive as what everyone else is doing, for no logical reason, just because that's what other people are doing, they follow and loose out as the investors who keep enough cash available, pounce at the cheap price and cash back out again within a couple of days when the oversold stock invariably goes back up. Most stocks will go back down, and back up and back down etc etc. While everyone waits for the fdl news, fdl has become a great day trade, it goesup and down betwen 1.5c and 2c each day,check the daily data. That's because some people get nervous and can't hold and sell and others buy in. With good news it will go up, bad it will go down and no news it wil go up and down but slowly down until news shoots it to a new range of prices....eg say to 17c.
If there wasn't upside, the stock often doesn't bounce back and recover, but with fdl and gda, there is news coming, and I think it will be news well worth waiting for.
I love the volatility but you have to have knowledge, be prepared and be tolerant and be cautious.
Most specs are not overvalued at the moment, some, compared to most spec stocks are sigificantly undervalued, like fdl and gda but I can think of only 20 or so that are over valued. I can think of many blue chips that are over valued even at the lows of last week.
cheers Fatstocks.
FDL
flinders diamonds limited
