DRM (ASX) Ann: Appendix 4D and Half Year Report

Originally posted by eshmun ↑

I can't give advice on HC only offer my opinion. Every investor has a different strategy. If DRM were in my portfolio at 60cents they would have been bought with a weighting based on my perception/analysis of risk and value for the company at the time I bought and an impression/expectation about certain milestones the company should be meeting in the future. If I was still holding them from that 60cent level because the milestones hadn't been met and for one reason or another I was comfortable for the reasons why the milestones had not been met (all very hypothetical as I'd normally sell if my expectations aren't being met, particularly if the stock has a reasonable weighting in my portfolio. I tend to just put the spec stocks in the bottom draw) I'd probably continue to hold hoping that circumstances might change but given the current circumstances I wouldn't be feeling overly encouraged that I'd ever see 60cents again. My original portfolio weighting would mean that my portfolio would probably not have suffered any significant deleterious effects in respect of the stocks fall from grace and I'd chalk the loss down to another learning experience. By the way I was here on these threads cautioning about the risks around the time the shares were trading at that 60cent level and I was never personally tempted to buy.

On the other hand if I was particularly overleveraged to this stock for one reason or another I would definitely not attempt to average down and probably would take the opportunity to sell off a proportion of my exposure if the price revisited 30cent or above in the very short term and hold the remainder in case the company actually makes a real turn around. If the stock price retested its 16 cent low in the next 18-24 months I'd seriously consider taking what I could get and cutting my losses but I'd first try to seriously understand why the price has reverted and try and identify any possible catalysts for future SP appreciation before making any rash sell decisions.

If my holding or weighting in the stock was very small I'd just throw it into the bottom draw and check in on it from time to time. It's actually amazing how many bottom draw stocks make comebacks if you give them enough time. Esh

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Great analysis Esh! Where would your stance be on DRM if you bought in at 25 cents. Cheers in advance.