Help me Understand Speculative Price Gains on Exploration Miners

After the recent rises and falls in BAT, MUS, N27, CLA etc - and considering a number on here made/lost reasonable money on them, I'm looking to understand how you find/evaluate and select these stocks.

What is it that drives this kind of market behaviour?




It seems to correlate with the announcements of the commencement of drilling programs - however similar announcements of drilling programs earlier in the year on other (or the same) companies resulted in minimal or even reactive price action.

Is there just a general appetite for this kind of risk in the market at the moment that wasn't there a year ago, or is there something different?

 

Flip a coin.

 

Price moves on sentiment/expectation/results. Am new at this, and I think based on graph above, less is perceived when you are past the orphan period.

 

Thank you,
I did find that graph, but it still doesn't note what drives the bursts - I'm guessing it's the diffrerence
between expectation and result (with a healthy dose of market exuberance thrown in)?

 

Most markets move on expectations. Even if results good, if not up to expectations then prices can fall.

Watch Bitcoin for an example of how markets move. You may not be able to do much with them at the moment, (so their intrinsic value is questionable) but wildly optimistic expectations are driving a rapidly rising price. How long it will continue is anyone's guess.
Marg

 

Indeed, but what I was hoping to kick off discussion here in this thread was - what the expectations of these small miners and how are they normally set?
My first guesses are that it's the amount and grade of materials underpinning the exploration.

 

it speculative nature, the market is in full force at this end of town
you can make 10 times your money or 100% return or you can lose 95% of your money etc..

experience investors in the market always devote a portion of their money into high-risk high reward scenario knowing full well they can lose the money but the return can be mouthwatering
I have some of those, throw in 10-20K end up with 200K or 500K.

I have a core holding that delivery me reliable dividend and capital gain, then I have specs money about 20% of my portfolio that I throw around to 10-15 potentials, 5-6 may go **** but the other 10 will make up for it and a whole lot more.

The guys that lose usually newbies want to get rich quick on the stock market and bet on high-risk stocks with no other holding, not all of them lose some do win big times but lottery like odd

experience investor plays as part of the overall risk-reward scenario and never put themselves at risk of losing large capital, they preserve capital and manage risk and always has the capital to fight another day.

Last specs I entered a few months ago already 2 1/2 times the money and there are more to go I cash out some when it reach 5x, then 10x and usually exit 20x or more

at this end of town it all about trends and fad, some do go on to becomes very big business that deliver cash cow and you becomes super rich with 20-50K investment but mostly fad and trend

 

Understand this,
But the question is: how are you selecting your high risk plays? What data are you using the set your own expectations?

 

Research and reading, I have subscriptions to AFR and I read a lot of stock market-related material, I usually pick up a lot of them from there as a starting point then I decided yeah or nah
after digging further and reading their books

I am more of looking out for small solid business that will eventually grow massive some days
an example some years ago I spot a company called smartgroup (SIQ) going IPO

I used their services before and it very good, I read their balance sheet and cash flow, it looks cheap for a high cash flow generative business ....so I chuck in 30K

in the last 2-3 years, its profit has gone up 3-4 times, its dividend has gone up 200% and at a moment I sits on 5x times the money, nothing has changed and I think it can grow bigger, but as always as part of my strategy I cash out some along the way and lock in the profit, use the capital to further another high risk which I enter some months ago ..sits at 2 1/2 times now.... still hold 60% of my SIQ.

don't always get them right and there are some I forgo to see them gone up a lot
but that the nature of the beast I don't regret it, it part of my process and my strategy.
there are an opportunity every day on the market

The one I forgo is A2M I could get them for $1 but no, it now close to $8

I sit, waits, read and repeat the same formula years in and out, bull, bear I don't care

need lot of patient and reading my strategy, most dont have the patient
but that just one strategy I have dozen of them, from shorting stocks to options to warrants

shorting WBC and CBA has been a windfall this year this forum give good sentiments when to go long and short on banks