Rick Rule history on Paladin:"The most instructive was Paladin....

Rick Rule history on Paladin:

"The most instructive was Paladin. Paladin was a little Australian penny dreadful, run by an amazing man named John Borshoff. At the time I entered the stock, it had a 2 million Australian dollar market cap. And its principal asset base was a database compiled by the West German government at a cost of a billion dollars that they gave Mr. Borshoff as a severance benefit when they laid him off, because they didn’t care about uranium anymore. I led a private placement at 10 cents a share. And I was rewarded for my genius by watching the stock go from 10 cents to 11 cents, 11 cents to 12 cents, back to 11, 10, 9, 8, 7, 6, 5, 4, 3, 2, 1. 10 cents to a penny. If you have a 90% embedded loss in a position, you don’t have a hold, you have a buy or you have a sell. You were either wrong, in which case you salvage those few pennies you have left, or you were right, in which case, you buy a lot of stock.

I reassessed the situation, I decided I was right, the market was wrong. I bought a bunch more stock, sadly, not at a penny, at a penny and a half and two pennies, and three pennies, and four pennies. And within five or six years of that market bottom at a penny, the stock was $10 bid. Now, I’m not going to suggest to you that I held my whole position and sold at $10. That didn’t happen, either. If you own stock at an average of a dime, and my average became lower, when you see $1 bid, you sell enough stock that you have recouped your capital and paid your capital gains tax, if any. And when you think that the price of uranium can go to $30, and it’s $60 bid, which is to say it doesn’t have to go up, ultimately it will go down, you begin to sell the rest, which I did."