sentiment driven share prices

Had some free time today (like most days obviously)

And I was going through the old posts from the SIR threads , from early 2012. Purely to examine investor sentiment towards the stock when times were not a rosey as they are now. Thought I'd look at the kind of language being used on thread , the type of comments being made about the company, prospects and management etc.

What you'll see there may ring familiar with the current AMX situation. Bagging out of management , nay sayers everywhere, drill results too slow or not good enough, this is a dog with fleas. ..etc...etc...avoid..avoid...

But there were/are a few true believer there also.... Most are now likely much wealthier...

SIR went from 6c to $3 in less than a year, which started with just one news release. Market cap from 9million to 700million.

Some poor long term SIR holders started selling as soon as the rally started also, at around 15c (50million shares traded in one day)

I hope for their sake they bought back in soon after.

They let the negative sentiment get the best of them , and ran for the exit at first change they got..

Here's just one thread of many -

http://hotcopper.com.au/post_threadview.asp?fid=1&tid=1645820&msgno=7629732#7629732

And you might say ...but Goochie , AMX has nothing to do with SIR ?? and the set of circumstances of both co's is too different, the two are not comparable. Why post it here ?

But i'm not trying to say that AMX is the next SIR (we've been there and done that already , going from 6c to $3)we're at a different stage ,with a new set of opportunities.

But while the above is correct in terms of resource type/value and many other company specifics, its the "sentiment ruling the stock price" factor that I wanted to highlight. Just because a stock is down at low prices doesn't mean anything in regards to the long term value.

Lately the AMX SP has been trending as if the company is going to fold or go to cash backing. Logically, the company has every right to exist with the kind of assets they hold, and the assets have every fundamental right to be worth more than they are today. So the only other option is for the trend to change at some point and the full value of the asset realised in the fullness of time.

Sentiment is a funny thing. It causes people to buy high and sell low . It causes them to question their own judgement, even when they know they are correct. Sentiment is a double edge sword that will send your stock price soaring one day and crash to the ground the next. Trick is to be a contrarian investor most of the time, but not all of time. You also need to know when to invest or sell with trend , not against (perhap this is where I could use some improvement!, but I make ST trades to smooth out these bumps for the most part)

So what do you focus on if you consider yourself a true value investor ? Sentiment ? share price ? or the value of the assets under the companies feet and what the market is pricing them at ?

ps. Come to think of it, there is actually a few company specifics simular to SIR and AMX actually. Both co's have a great resource shaping up , and both co's own large properties in the right macro geological setting for their desire metal and both own a substantial portion of a mineralised belt.

The best place to find your next big discovery is right next to your last one....owning 150km of gold bearing belt helps in this regard for AMX...many bites of the cherry there I'd say ..

[end]