Are investors too caught up on shareprice as an indicator of value ?
Here's a link to a nice case study on an old favourite of mine ,Andean Resources.
When reviewing this link , keep in mind a few things:
1. Andean's sp went from sub 40c to $7+ once corporate activity began (in less than 2 years). Highlighting the gap between share price and the actual intrisic value of the company.
2. The timeframe illustrated in the link , represents a simular macro economic environment to today , with debt contagion issues , global default risks , gold price weakness and general stock market volatility.
3. Simularities can be drawn between AND and AMX , in both price movements and reaction to market conditions. The AND chart shown looks very very simular to our current situation and highlights the oversold nature that currently exists imo.
Check it out , and read a few of the AND threads from that period here on hotcopper. Note the negative sentiment , bearish predictions and loss of "hope" from long term holders.
Its an interesting case study at the very least and a good guide on what to expect when holding a quality stock for the long term .
The ability to learn too ignore short and medium term swings and focus on longterm upside is a hard and at times gutwrenching skill to acquire. But a skill that ultimately allows you to see opportunity , where others see only hopelessness.
"The big money is always in the stocks that the market misunderstood" - Marcus Padley, Stockboker
AMX Price at posting:
78.2¢ Sentiment: Buy Disclosure: Held
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