Is NVA a good bet?, page-50

Tell that to the likes of Twiggy Forest or Gina Rinehart, or practically any small business owner who has 100% invested in their business. No one got stupid rich by starting with a diversified portfolio. By definition a diversified portfolio is put in place to reduce risk and protect capital. I am not suggesting anyone should take that risk, but to suggest that anything is too risky is to be stating your own perception and risk tolerance and doing anything else is wrong (Akin to offering financial advice, al-be-it accepted wisdom).

I prefer to use my analysis to manage risk before investing a cent in any one company, starting with assessing long term macro trends in an industry (life in 10 years time), finding the best prospects in that industry, and then assessing the maximum potential value of each prospect and discounting back for all the risks. I then pick the best prospect for maximizing wealth and take a 5-10 year position. I continue to assess the portfolio of prospects to ensure that my assessment remains the best value prospect and would only ever change if a fundamental of the industry or the company changes. In short, I assess all, invest in one, monitor all, and only change if either the macro industry position changes or a significantly better value proposition appears.

In the gold space, I don't see any others with the same scale potential as NVA. The valuation of the whole business back when the first 2.5m oz was announced made this an extremely low risk proposition given the sheer number of surrounding undrilled prospects. With Directors flooding their own cash in, some decisions that showed Directors valued shareholders above their self interest and a knowledge of heap leech economics when the market appeared to be focused on the low grade made this the easiest of assessments for me.

20 years ago I put $20k in a share trading account and to this day treat that cash as my position to protect. This allows me to take a higher risk position and achieve greater rewards. The wife might not like the prospect of losing a house, but I am aiming for independence (not necessarily from her ). The day I start to worry about losing it will be the day I should diversify the portfolio and satisfy myself that rude wealth is not going to come for me. I do not recommend this approach for anyone, I merely make the point that too risky is your risk position and that risk can be mitigated by both diversification and knowledge, understanding and research.

DYOR everyone and then DYOR again and again even after you buy in. If your afraid to lose, you should diversify. If you are willing to take a chance, you can limit your risk by understanding more than anyone else and setting your limits/stop losses, and exiting when the upside ceases to be as attractive as other prospects/options.