Hi all, I was speaking to an experienced and successful trader friend of mine over the weekend about Kentor. He said he wouldn’t touch the stock at present. He identified a number of variables that are affecting the SP:
The honesty of the management, how announcements about Andash were expected in December, then January, then February etc., but as yet have not been delivered. The political instability of the Kyrgyz Republic, with the government considering cancelling all mining licenses in the country and then going through a process of renewing them etc. (this could take months) The price of gold, with some HC members forecasting and hoping for huge price hikes. (As we can't predict the future, hoping for a huge gold price hike should not influence a commercial decision today, the decision to buy should be based on today's fundamentals, and if the price of gold does spike, then that is a bonus.) The need for a community meeting and community support for the mine. The time that it has already taken, and will continue to take for these variables to be eliminated, he believes that members may be missing out on great opportunities in other stocks that have far more manageable variables.
He stated that all this adds up to most professional traders avoiding the stock, now that it is consolidated. He warns about “sentiment ruling sense”. Warren Buffett and most successful professional traders have no sentiment in a stock. They buy and sell on a commercial basis and at this stage he sees no commercial basis to buy KGL with all those variables in play.
For those holding on for the long term, and especially for those holding on even if Andash falls through, you may be missing out on other great opportunities in stocks that have far less risks. His example is Investigator Resources, IVR, trading at 5.9c a share in August last year and now is around 39c a share! A massive 625% price jump! (Check out how happy the HC IVR members are! “Shall I sell today for 200% profit, or wait for the next ann. and make 300%?!!!”
Some HC members are hoping that KGL will become a "ten bagger", that is about $10 a share! Even if it were to come true, that may take 2, 3, 5 or 10 years, what opportunities will have been missed in the mean time?
His words to HC members were not to get too stuck on one stock, be concerned about the number of variables effecting KGL and to keep vigilant for other opportunities that arise. If you can make 20%, 50%, 100% or even 625% profit in the months leading up to final Andash approval, take it while it’s there! Then you can buy even more Kentor shares if all goes to plan.
He might consider buying KGL, if and when, all of the variables are removed and a final announcement is made that Andash is happening, thus buying into the stock on a guaranteed uptrend. But if Andash falls through, he’d be advising to avoid the stock, at least in the short term.
Some thoughts from an experienced and successful trader. And he may well be proven wrong, but he’d prefer to err on the side of caution, and believes that there are more reliable stocks to invest in at this present time.
Members need to be taking a balanced view about KGL, let sense rule over sentiment. If after considering all of this, and also considering the great research presented by HC members about KGL, you still feel that KGL should be in your stock portfolio, then he wishes you every success with the stock. At least you've had the opportunity to read another perspective, which doesn't often happen in these HC forums.
Pewrsonally, I own plenty of KGL shares myself and rate it a long term buy at the present time, but remain concerned and nervous about the variables, especially the government's present indecision about mining in general in the country.
KGL Price at posting:
$1.15 Sentiment: LT Buy Disclosure: Held
(20min delay)