Stock Talks: NI SRO Notes

Wednesday, September 30, 2009

Yesterday, I talked things over with Anna and decided to go along with the 1:5 SRO of NiHao Mining Resources (NI) this coming Monday. Here's a short computation for my stake, not including the charges which is about 0.5% per transaction:

Original purchase: 10,000 shares at 14.25 = 142,500 pesos

Price per SRO stock: 1 peso

SRO Purchase: 50,000 shares at 1 = 50,000

Total investments: 192,500 pesos

Total shares: 60,000

Adjusted break-even price: 3.20 pesos

Theoretical Adjusted target price: 5 pesos

Projected value @ target price: 300,000 pesos

Net earnings: 107,500 pesos

Money Shot:
Now the question is whether or not the price of NI will go up higher than this price by the time the lockdown period until December expires. For sure, the price will avalanche the moment people start selling off their stocks, IF they still would want by that time. Risky if you think about it, because there's also the gamble on assuming that the market will still be healthy by the end of this year (which can't be guaranteed). The only safeguards I can think of is that NI is a strongly jockeyed stock and that the outlook for the end of this year is better than last year.

Ah well. Risks risks.


Anonymous said...

Hi. I've been following your posts. I'm trying to look for those blogs you made about Stock Exchange/Trade Basics and I can't seem to find them. If it's not too much to ask, can you repost the link on your next entry on stocks? Thank you.

And my sympathies to your break-up. I thought the third party was a baby. Hence, the term consequence haha. And kudos to your excellent humor.

--Pmaker needs this:


Haha. Anyway it's all in the past.

For the other articles, I didn't know people were reading it so I didn't tag the articles properly.

I've updated it for you.

Thanks for visiting.


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