Most ASX microcaps are now significantly below COVID bottoms a few years back. What is promising is buying liquidity volume are not great. You can argue the same way for buy orders.
But the problem comes back to the cheaper the asset, not only is there increased demand and decreased supply, it becomes more affordable for even ordinary individuals to own a large portion of a good company. Most buyers are getting ready and averaging down if they have not yet started. And hiding in plain sight. YET I argue it’s still a bad time for short term traders
1. The bottom is nowhere in sight. Not in terms of price, but time frame. We are very close to the bottom price wise but not time wise with all the current problems in the world.
2. Hence instead of an extreme one year rebound post COVID last time round, 1 year becomes 5 years. PUR 2c to 1 dollar. Afterpay 20x growth in a year. This time round it’s going to take 5 years
3. But I have a suspicion because of the longer time frame available to build up a base and to build up sustainable market confidence, the highs will in time be much HIGHER albeit over a longer time frame.
4. If you take into account the lows are currently much lower for microcaps than even during the COVID crash (many ASX stocks with substantial businesses at under or around 5m market cap, I believe there is significant probability of extraordinary gains in the medium to long term.
ZMM Price at posting:
11.0¢ Sentiment: Buy Disclosure: Held
