Hi All,
It has been over two years since I have held SDL or posted on this thread. I still follow the company from the sidelines, so hopefully some will find my take on it of benefit.
For those of you who don't know me, back in the day, I was one of the biggest believes of SDL (and I still am today). I read every article and snippet there was to read about SDL, and I invested every spare bit of cash I had into the company (plus money I didnt have). To the point where I was so heavily invested that I couldnt sleep at night.
I averaged a purchase price of 16c, and I watched it go all the way up to 66c, at which point I could have paid off my house, gone on a holiday and still had plenty of cash in the bank. But I got greedy, and I fell in love with the company. I wanted to see the stock go to $1
I watched the share price slide back to 60c, back to 50c, back to 40c, back to 30c. The entire time, trying to convince myself that it would go back to $1.00, based on the potential of the company. I just couldnt bring myself to sell.
Eventually my wife had enough, and she forced me to sell the shares at 22.5c. At the time it was the hardest thing to do.
Let me tell you. It is difficult to wake up every morning, and motivate yourself to get out of bed and go to work, to earn money to pay off a house for the next 20 years, which could have been paid off in full, had I of taken my rose colour glasses off, and actually looked at what was happening, not what I wanted to happen.
I learnt a very valuable lesson from this experience, possibly even more valuable then the potential money I lost. And I am determined not to make the same mistake again.
I see a lot of familiar names in these threads, and the only difference between myself and a lot of you, is that my wife put her foot down and made me sell. That was it. Otherwise I would have found myself in the same position a lot of you find yourselves in. Still holding this stock at 1.6c. I owe everything to my wife.
Some may say I am gloating at selling out at 22.5c, but that is not the case. I am embarrassed about not selling out at 60c, I am embarrassed that it was my wife who made me sell. I am embarrassed that I had it all and threw most of it away.
Unlike me when I held SDL, I ask everyone to take their rose coloured glasses off and ask yourselves the following 3 questions.
1. If you were to show a 10 year old child the SDL Price chart over the last 3 months, and ask them what direction the share price was headed. What would they say?
2. If you were to show the same child an Iron Ore Price chart, what would they say?
3. If you had $100k to place a bet on the share price bottom, would you put it on 1.6c or 1.5c (and below).
You need to make sure that your expectation of the company share price in the short term is consistent with the answers to the above 3 questions. Because if you expectations are not consistent, you are leaving yourself open to a world of pain.
The last thing I want you to think about is debt. There is a massive debt problem out there in the world at the moment. Look at examples like Greece. Then look at the US, they are in a mess with $19 Trillion worth of debt, they can never pay off. Then look at China's economy. And we are looking at these guys to fund SDL and buy the Ore. Then read the articles about Glencore. The world is an absolute mess out there, and it all has to do with debt.
Then here we are looking for billions of dollars of debt at a time when no one has any money and everyone is already in debt up to their eyeballs. Who is seriously going to loan us this money?
Some may say that I am downramping, but that is not the case. I still see massive potential in SDL and I very confident that one day it will happen, and when that day comes I plan on taking full advantage of it.
Unfortunately though, that day is not today. Nor is it tomorrow, or the next day, or next week, or next month or next year for that matter.
Despite being extremely confident the company will take off one day, I am not going to expose myself to the risks and pain that is going to follow over the next 12 months. Because they are not going anywhere anytime soon, and anything could happen between now and then whether it be a debt driven World Market Crash, Capital Raising, Political Unrest, World War 3 etc
So what is the answer? I don't know what the answer is, but I know what my plan is. Continue to sit out and watch. Patiently watching the share price, more then likely continue to fall, or at best trade sideways for the next year or so. Waiting for the share price to to show signs of a turnaround back up to over 2c. Because the money tells the story, and when the money starts flowing back into the stock, that is when you know it is time to buy.
No doubt I will cop a bagging from this post. But before you bag me out, I ask you to sleep on it for at least one night, to give yourself a chance to try to look at things from the view which I am looking at things. Then you will be in a position to clearly determine whether I am completely mad, or if there is a possibility of what I am saying might actually be right.
I can handle people bagging me, I am not scared of that. There is also a chance I may be wrong, I appreciate that too. But anyone who is not prepared to at least sleep on it and consider the possibility of what I am saying, before proceeding to bag me out, has still got their rose coloured glasses. And trust me, I know what it is like to look at SDL through rose coloured glasses. Because I have been there before myself.
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