Morning traders April 3

morning traders,

Daylight savings finished in eastern states, adjust your lifestyle accordingly. Some great discussion on the STT weekend thread. Will post Anton C s post, as most thumbed up but worth going over some of these threads just to reset on exactly where we are playing here at the glamorous end. It may not be so glamorous after all.


"Agree with this post.

I'll leave the discussion around directors and their legal veracity to others but at a personal level, I think education is the key.

Nobody has a gun to anyone's head to trade nanocaps. If we're all honest with ourselves, we do it out of greed and/or impatience; the desire for maximal returns in the shortest time possible. And to be slightly philosophical, the market is like the ocean; it doesn't care how inexperienced the sailor is or what skills he/she lacks. If you want to enjoy the benefits of the small end of the market, you need to equip yourself and understand the game. Otherwise, much better looking at midcaps or other types of investments.

Discussing the corporate stewardship side of things is a fairly reasonable idea. It's the equivalent of voting with your feet and giving terrible reviews of a product/service on social media review sites. Whether it achieves anything is hard to know and I suspect probably not.

I think it's important for those new to nanocaps to control their emotions and recognise that when a more experienced member says they think stock xyz has great potential, they are not necessarily implying that it's a real-deal business that's going to stand the test of time. What's being described is the opportunity to trade the collective market sentiment and leverage a temporary mis-pricing in the market's attitude towards a stock. That may seem an abstract statement to make about a company that has no revenue and likely only holds any value, via a leading name's value in the peer group, but that is the precise nature of this end of the market. We are seldom arguing over things like whether one nanocap's PE ratio is justified wrt to the peer group or whether it's depreciation % of R&D was justified or instead gives an inaccurate measure of profitability. We are arguing over whether one dubious tech that probably should never have listed, deserves a higher MC, based on the logic that its peer group of other techs that probably shouldn't have listed, are trading at a considerably higher MC. If all of that sounds cynical, it's because it is! And anyone new to nanocaps may as well quit now if they're not prepared to adopt a rigorous skepticism towards the small companies they invest in. Importantly, this is not the same as being negative, which will also hinder gains and make the investor full of doubt. This is often seen in professionals, who have amazing technical industry knowledge on a topic but lack the positive nature to play the game. Perhaps they recognise so acutely that most of these companies will never make it, are making dubious marketing claims and cannot get past this. These folk are far better served analysing and investing in larger, more established businesses. I have some crazy smart friends (computer scientist, engineer, IT manager, etc) who fit into this category."

Good fortune this week to all.