In my humble opinion, I would describe the events over the last...

In my humble opinion, I would describe the events over the last week and a half as a result of 3 key drivers:

1. Complaceny
2. Volatility
3. Risk Adjustment

Complacency

A degree of complacency enetered the markets following a stellar bull run across all market sectors (eg general equities, resources, emerging markets).

Volatility

The level of complacency meant that overall volatility was relatively benign, which is supported by historically low implied volatility levels across equity markets (VIX), foreign exchange and commodities. After the "impact" from China hit, volatility rose, reflecting a shift in market sentiment from complaceny to cautiousness.

Risk Adjustment

The rising volatility premiums caused large market players to begin reconsidering their positions and thinking differently about the risks involved with their investment. This risk adjustment saw an exodus of funds from stocks and commodities and a puring in of money into government bonds, with most fund managers taking profits from their more speculative investments first (eg emerging markets, resources etc.), and then later exiting the more "stable" investments (eg in the equity markets).

This is why the price of gold dropped $40, a pure reflection of the bigger players attempting to obtain liquidity whereever they could find it. When things look shaky, take your money out of the more 'riskier' investments first, and then progressively drain the more stable investments.

This will continue to occur until fund managers are so cashed up, that the liquidity will need to be poured back into the markets, causing another bull run which will exceed its previous highs.

In the case of GIRALIA, it can be categorised as one of those "riskier" investments, hence we witnessed a great degree of profit taking.

The fundamentals HAVE NOT CHANGED - all that has changed is investor appetite for risk. Moments like this need to be viewed as tremendous buying opportunities, rather than the "end of a run."

Take a position and stick to your guns. You will be rewarded in the end.

I hold, and add to my position on dips.

Zinc Co is going to be a terrific money spinner.

On our markets