Don’t Panic

It has been a bloodbath again in the small mining companies.

With my own portfolio, I have fared much better with the large royalty companies than the small explorers. Even the smaller producing companies have been getting hammered, even though the price of gold, especially in US dollars, is up.

After Theresa May called for a snap general election the other day, the price of gold in pounds dropped to under £1000 an ounce. It was around £1030 a few days before. I should be happy, I suppose, that the currency I get paid in and use became a little stronger-even though they are just pieces of paper that people are happy accepting – but I’m not! Many of the assets I hold are in precious metals and are priced in Canadian dollars and US dollars, so I felt the fall with the rest of you.

After being in this game for about 6 years and making a shed load of mistakes, I can tell you it’s not easy making money by investing and speculating. Its mentally very difficult to see the prices of what you deem to be very valuable get nailed down. You must accept the fact that you could be wrong and re-evaluate your ideas as necessary.

The more I learn, the more I realise how little I know and how little other people know that think they know.

But you must stay calm and think rationally.

I like bargains and I can’t seem to find any right now other than the commodities market. I mean Russia may be cheap, along with other developing economies. But my real interest lies with Gold and Silver and these cheap mining stocks.

Volatility is great when it is to the upside but terrible when in reverse. But remember volatility is not the same as risk and volatility can be your friend if you allow it.

So check your thesis and plan and decide if you believe it is right. If you do, then take the risk and adapt as necessary. Be prepared for it to not work too. But don’t panic if things don’t go your way. Learn from what you are doing and keep moving forward.

Alan

 

Categories: Investing

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