Short Term Trading Weekend Lounge : 7 - 9 Oct, page-67

Waiting4Godot, re Stock blacklists. Ok I'll take the bait, but will tip-toe cautiously.

Lynas (LYC) gave me multiple traumas and lessons

This stock was my introduction to Hot Copper (I was holding before I knew about HC), and the reason I took up Technical Analysis as I was so beffudled by the price movements of the time. Of the four broad knowledge areas relevant to the market, I previously well understood Fundamental Analysis and Macro Economics, whilst this single stock ultimately led to an education in both TA and stock promotion. So the experience was good for me as much as the losses hurt.

I’ll focus here though on its corporate structure, referencing the 2012-2013 version when I invested and traded it, (management has changed now). I now blacklist any company with an "Executive Chairman" and there is a major gold company I am aware of with this structure, copied from Lynas with its investment banker as EC. It's poor corporate governance. If someone wants to exercise direct control, then be the CEO and have a Board and Chairman around you to manage shareholder interests and to hold the CEO accountable. If it turns out the strategy is wrong and needs to be realigned, there's no one to tap an EC on the shoulder.

I also won’t touch biotechs from hard experience. Cellestis (CST) I sat there for 6 years I think, where it went largely sideways, with retailers holding through all the risk phases and when they finally get FDA approvals, there's more years whilst they get traction on sales, and when all looks good and the business is really ready to build profits, a US Pharma will then come in and buy it for a modest premium. Retailers take the risk, big pharma gets the upside in biotechs. Exceptions may be if you are in very early in the capital raisings at seed stage, but there is too much product uncertainty at this stage for me.