Kitco Commentaries - Dr. Richard S. Appel: "June 25, 2006 - The junior exploration market is a minefield to most who enter it. This is because few individuals are properly prepared to maneuver in it, and are thus fated to suffer the inevitable consequences. Yet, if properly approached I believe that junior stock speculation can greatly enhance an investor’s wealth.
An investor may wisely or luckily select a company’s stock that is destined for higher prices. Or, he may become entranced by one of the over-zealous promoters who convince him that his company’s future is destined for a meteoric rise. In either instance the investor may enjoy a roller coaster ride that takes his stock to dizzying heights, only to find it returning to or below his starting point when the meteor falls back to earth.
The purpose of this essay is not to deter investors from this market. My hope is to better educate and prepare the reader so that he or she can reap the rich rewards that it offers, while minimizing their losses.
In order to achieve this goal one must understand the true odds for a company’s lasting success, the players in this market, and the application of risk vs. reward when choosing a company. Further, the risk must be spread among a number of companies. In this fashion if one does well it should more than compensate for any losses produced by the others. Finally, and possibly of greatest importance is the absolute need to control one’s emotions, and especially our greed."
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