Good question,
YoosufWah:
You asked:"What made you buy in back in June? was it luck or more well executed quantitative and qualitative analysis of the company and where the market was heading?"
In an earlier post you also asked:
"Someone who bought in at sub 20c in March last year, please describe to me in depth the emotions you feel seeing your stock go up by more than 4000%.I need to truly understand the pain of missing the boat."
Missing a knockout winner happens to all of us if you're in the market long enough and it's a case of 'there but for the grace of God go I'. I didn't want to answer that and to rub salt in the wound but because you've now asked about personal experiences with analysis etc. which might be helpful to readers, I'll open up.
Reasons for buying
Luckily, I bought shares in the high 30's and options under 10c - and up to about 13c (plus a few later top ups) - in good quantities. IMO, it is essential to DYOR. Then you can decide how much you love the story, how much you'll invest, and for how long and what you're prepared to sell to hold that many for that long - roughly speaking - since we're all capital constrained.
I decided that I really loved this story, which I described to friends at the time as the best I'd seen since one that luckily set me up for life a couple of decades ago, when I fortunately was able to kill it. ( I won't name that here as I'd prefer to keep my anonymity after buying a significant Top 20 holding of that stock).
If you were lucky enough to look around it was possible to see that:
- the entire world was about to undergo a huge transition re energy storage, and that would eventually underpin those with significant Projects - so momentous shifts in thinking;
- great energy storage solutions would be of appeal to just about everyone - from those living in remote places or the '3rd world' who might want energy for lighting, or water needs etc.to those having cars etc. in the 'first world' - so tremendous application, world-wide;
- Government legislation around much of the world - coupled with populist demand - would add to the inevitability of a transition, especially after disasters like VW's 'Dieselgate' - so assurance of big change (across all those areas);
- lithium was likely to remain relevant for many many years, with so much technology and investment based on it in the foreseeable future (even if things like hydrogen fuel cells grow strongly too) - so heavy demand for a hard to replace product to meet that change;
- a Zero Carbon approach would have very great market support worldwide, even if many feel that we are being panicked about man's role in the climate. Since everyone wants clean air, less noise in cities etc. any doubting voices would be overwhelmed politically, assuring inevitable tailwinds for change, that would support lithium's much enhanced role - so assured popular appeal and support;
- Communist China made a catastrophic error in failing to be open with the world about Covid-19, and with territorial aggression etc. which would cause both a deliberate shift away from relying on them for resources plus well-located Projects (near where the lithium was going to be used) would become way more attractive because of less travel etc - as well as less wastage of resources in shipping etc. - so shifts in focus to more reliable jurisdictions, who would be in catch-up mode, so very supportive approvals etc.;
- Germany was a world class place for governance etc., - so very easy to attract big investment capital
- and much more - you get the drift; all big picture stuff;
- I also liked the clarity of thinking espoused by Francis Wedin in corporate materials, so I had a good degree of confidence in the management from the start, and I liked that they seemed to be recruiting well. Management were well incentivised and there was a great corporate structure with few shares on issue - so what looked like a great team capable of delivering on the potential;
I started buying in May 2020 (bought cheapest oppies at 8.5c and went on from there). Here's a
Post #:45132811 I did on 10 June 2020, which exposed most of the above points. Forgive the repetition but wanted to show what I actually said in real time ...
Post #: 45522376 on 29 June 2020 (at 57.5c)
In this
Post #:45522376 on 29 June, after about 3 weeks more homework, my views were increasingly assured as I'd seen nothing to shake the major underpinning investment fundamentals; in fact the reverse. I felt that the upside possibilities were way, way more likely to influence the stock in future than any downsides, so if lithium prices at least held their own, the stock should rise in price and especially should rise if lithium prices increased - which they did.
I expected lithium price rises (apart from what the experts said) by just applying basic principles. Prices had been smashed in 2018, causing deferment of some project expansions. The seeds of the next boom are sown in falling prices and cutback periods like that, so that added assurance to Vulcan's very large, brilliantly located, visionary project as well IMO.
ChartingOn the way through, I started a VUL Chart thread, as I thought there were some emerging patterns that others may be interested in seeing. I see charts as a support / cross-check for fundamental analysis, so I always look at them to check my FA work. You'll see that I several times suggested a Buy even though the then recent patterns had been
falling wedges (which I knew from research and past experience were typically bullish, especially when volume patterns corroborated etc).
These took a little courage - and time - as I was putting it out there often when prices were slipping back a bit. With hindsight, my effort was rewarded with even greater conviction in the story, I think, which helped me do really well out of my initial cheap holding. Nice.
How does it feel?
So, I did lots of research (FA and TA) and applied commonsense and business sense as best I could. Looking back, I feel extremely fortunate - to answer your other question - blessed, humble, surprisingly quiet about it because I don't want to seem smug - yet am so happy I'm sometimes bursting out of my skin. I feel very grateful I was intuitively guided to some good calls, which I held with great conviction because I'd done so much research. Points just seemed obvious. I've been lucky enough to have this sort of experience occasionally before but I still keenly wish it on others - including friends and family who could really do with the lift up, knowing how amazing it's made me feel. Hallelujah.
(20min delay)