Stock Talks NI SRO Notes (Part 2)

Wednesday, October 07, 2009

To those following Nihao Mineral Resources (NI), after I posted my last entry about the stock, the price of the stock came crashing down like a badly made house of cards down from 14.25 to a measly 11 pesos just before the EX date.


Computing the paperlosses if you bailed out at the last minute, it would have been very bloody.

That's a whopping 20% cutloss.

I'd admit I cut losses as well at some point during the drop. The fear kinda just got to me. But that's just how trading goes. Anyway, the SRO came and went and yesterday, the intial price settled at, guess what, 3.25.

Break even for the guys who bought at 14.25.

But that's not really how it ends.

As of the end of today, the price of the stock has risen to 4.8 and it still looks poised to trend up further in the medium term.

What does that mean?

That means 4.8/3.25 = 50% paper gain on your investment, or following our example, 70,000 pesos for December on top of the initial 140,000 investment. Fuck time deposit. This is like Back-To-The-Future-Time Deposit.

Of course, paper gain is paper gain, and from what I've seen, prices on the release date come december will probably send prices dropping again, regardless of market status, but with the jockeys around, chances are they wont really let it end at 5 pesos per share.

Now the only factor we have left for this equation is, "What will happen to the market in 2 months time?"

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