EV/Lithium, page-1131

..if your sector (lithium)
1. drops even when the S&P500 rises and
2. drops even more when the S&P500 drops
then your risk:reward is abysmal

...I am often perplexed by market participants looking to buy cheap into yesterday's heroes.

in Dec 2023, CHN fell to $1.395 and did a runup of +30% to $1.815 by 20 Dec 2023, and with the overall market running higher into a Santa rally, it looked like a no-brainer to buy into at $1.815 as its all time high was so much higher.
As it turned out, it was a bear trap. The price has $1.81 again in mid May 2024 and then then made lower lows thereafter to 84.5c on Friday. You'd have been -47.93% down from $1.815 today.
1 year view
CHN Stock Price and Chart — ASX:CHN — TradingView

...it has been people who have previously been obsessed with CHN in the good old days who may have had sold them a lot higher or who never bought it, that would make up largely these buyers who now want to buy their most-watched stock at a 'real bargain'.

...TRUTH is there are many other better stocks out there but people had to buy their 'favourite' stock. Not because they understood the fundamentals, but because it felt like a dream to buy it cheap.

...Buying stock isn't like a $250k new Aston Martin you couldn't afford and could only ogle over, which you can now buy for half the price from a distressed car owner.

...instead of buying CHN the falling knife stock on 20 Dec 2023, had you bought CBA at $111 instead, you would be already up +29% (excl dividend) and ready to sell tomorrow. The difference could not be more stark, a $100k invested in CHN on 20 Dec 2023 is worth $52k today, whereas the same invested in CBA would be worth $129k, a difference of $77k which is 77% of the invested capital !

...the worst thing about buying a falling knife stock is not just the declines after you bought them, it is also the length of time you could stay in decline. In many cases, it could take years. Add that opportunity cost of your capital into the mix, your losses would compound over time.

....back in those days when BUD was the cult stock, I told their forum that if they would be prepared to take a -50% haircut and reinvest into a good growth stock then, they could have possibly recover 70-80% of their capital or possibly even all of it. They chose to hang in tight, keep the faith and lost everything after the company went into administration.
------------------
Sad ending of the week for lithium stocks on recession jitters after fresh U.S. employment data.

https://x.com/Andr_rej/status/1832138415875211663