Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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It is a guessing game to a certain extent, however these companies may have a total NAV value in them that is well above the SP.
At what stage you buy again is again guesswork. We only had a small holding in the IT which has about halved in value. To be honest we WILL buy more unless there is a dramatic amount of bad news, but we will only buy when it has settled and moved up a notch or two. New management and the NAV being confirmed as about correct will have us adding. We could easily have added at 43p but we waited to see if more sellers bought the price down, which they did. We do not know what it will be when we add, it can easily be in the 20s or even the 10s. All depends on when the sellers stop. There has to be value there and buying at around the bottom will see you at least double your money. The fact the fund is very low does not affect each of the companies it is invested in, they will continue to trade and maybe do very well.
It is a gamble and at what stage you make a bet is up to each individual. How often have you looked at the news paper showing highs and lows and though, "why did I not buy at that very low price?" buying at the bottom or around it with every company will make you money, buying at the top will see you often lose money initially.
When you say - "they will continue to trade and maybe do very well", look at the history of WPCT, many of the companies previously held by in WPCT actually stopped trading ! Some stopped just a few weeks after he put a large capital injection in.
And, most of the good companies there were in it have been sold in order to keep the show on the road, increasing the % of poor companies (most likely to 100% now)
You say "buying at around the bottom will see you at least double your money" but thats not based on anything than hope.
It could go to zero (not because theres absolutely no value at all in there but because the wind up costs could be larger than than the value)
If you want to pick a fallen fund, why this one? There must be many others. Whats special about this one?
OK it was run by an incompetent* egomaniac whose gone but whats left is the worst of the companies he bought, the fact he left doesn't help. neitherd oes teh fact whoever takes it over will need money. Woodford wasnt taking management charges from it. So, someone new immediately imposes an extra charge on it thats not there now.
You'd do better off investing in the few good ones he had to sell to keep his ship afloat, at least those have a valuation done by someone other than Link.
* incompetent at picking startups and microcaps. Provably so. What he did at Invesco bears no relationship to what he did at WIM.
Do people know which companies remain in the portfolio?