The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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@AM90 - I've, mentioned before on other boards (and maybe this one) that WSBN is a company that has been a bit of a thorn in my side.
I first thought it looked interesting at 2p but ultimately put my available funds elsewhere (and have done very well from it so no complaints). However every time I have a little more to invest I look at WSBN and see it on a rampant run and think I'll wait till it settles and re-asses as I don't want to get spiked.
It still looks a company with a lot of interesting potential but I can't bring myself to share the markets assessment of its value, but I had I ignored sense it would have roughly 7 bagged from 2p for me in a year.
LND on the other hand is easy to see the value and reasons for investing, but at the moment it just doesn't have the sentiment behind it. Hence the reason I've been periodically topping up since pre-consolidation days of an SP of around 1p.
nice posts happydaddock and sportbilly,
i think one could some up 'Price vs Value' as Most AIM explorers (e.g. WSBN) vrs LND.
For example, WSBN have no asset, yet there market cap is similar to LND. I had a quick look on the WSBN board and its full of posts saying the company is undervalued, claiming with almost certainty that they have discovered another Havieron without actually doing any drilling. Yet those who have been in WSBN for 12 months will have made more than those who have been in LND for 12 months. This is the very definition of irrational.
We have an asset and I completely agree with the post from SportBilly, that is the sort of numbers we are talking about for any takeover. The board have been through this before (twice) and know how to sell a discovery. There is no doubt in my mind, that in 6 months time this will be significantly higher. That's the beauty of sitting on an undervalued asset.
Ultimately fair value and rational investors will win out - i have no doubts about that. It only takes a bit of a rise to attract the heard from elsewhere.
I would like to re-post some potentially self evident, but often overlooked, points relevant to all junior explorers.
Mineral exploration is high risk and expensive to keep funding where the majority of explorers lose money, only a tiny minority actually make people rich. We must recognise that nominal valuations of an explorer are based upon the limited data available at the time along with estimated probabilities about unknown future finds, risks and the number of years over which projects may (or may not) unfold. As such much research into an explorer's potential entails significant subjective opinion.
Good explorers can, and have, experienced drops of over 50% en-route to long term success, whilst some bad explorers double in price en-route to failure. An individual's judgement of a company will be biased by whether they are seeking a long term investment or short term trade.
Markets don't care what you personally hope for, believe, know or misunderstand; they are moved by how everyone else acts. Large FTSE blue chips are primarily bought and sold by informed institutional fund managers. AIM listed junior explorers tend to exhibit lower volumes of daily trades driven mainly by small private investors. Statistics suggest about 75% of private investors lose money though poorly judged timing. As such impatience fueled by fear, greed, naivety, willful ignorance or fickle narratives contributes to the unpredictable volatility of AIM companies. I have seen folk on LSE who directly compare share prices of different companies without understanding the principle of total market capitalisation. I've also encountered folk who have bought into an explorer because they have misunderstood the term diamond drilling and assumed they were finding diamonds. Neither imply informed investing.
Many attempt to analyse fundamentals which may be relevant to a share price in the long term. I do not pretend to understand how best to analyse the short term effect of irrational sentiment, nor if there is actually any significant effect from so called ramping/deramping. Yet whilst we may judge those who act contrary to our own views to be wrong, every purchase or sale still contributes to moves in the share price. Each who critically evaluates an RNS or interview may come to a different conclusion regarding how best to act upon "the facts". Few will also consider how the behaviour of those who just skim-read an RNS's title, misunderstand its content, chase the momentum of the crowd, or instead act only on memes on Reddit may influence a share's price.
The irrational will always be difficult to rationalise or predict. All the more so in the current distorted macro-economic climate of bubbles and extreme central bank interventions where market prices and demand may bear no semblance to underlying values.
I am a patient and hopeful long term holder here but I take responsibility for my own actions and I never forget the phrase CAVEAT EMPTOR.