Hi
I recently bought £3K shares in £MTL Stockopedia super stock rating.Since buying stock has lost its 20% value.Wondering any advice on selling it or wait
Thanks in advance
Mohammed,
The stock is very small: £38M market cap. The Bid-Offer Spread is about 3% but averages around 8%. The volatility on the stock is >200%. They seem to have one investment - a gold mining prospect in the Phillipines. ... So I was reading this hoping that your position size is small!
Generally with Gold mines I try to ensure that I have diversification. This can be through (a) an ETF with a variety of holdings [an investment trust], (b) a royalties company that has lent money to producers in exchange for off-take agreements at a specified future gold price (c) financiers who lend money for either equity or a mix of equity and royalties.
Some examples:
- ETFs: GDX, GDXJ
- ITs: BRWM, BSRT (have a look at MTL shareholders list)
- Royalties Companies: FNV, WPM, RGLD
- Financiers: SII
Exploration companies are at the very high risk, very high reward end of the spectrum of possible vehicles. Normally these sorts of bets work within a portfolio of such bets.
However, your gold mining prospect seems to have made it through the maze of exploration risk into production! Well done! A small stock like this is going to be news driven, so expect sudden moves up and down with company press releases, earnings dates and moves in the gold price and US dollar. Looks interesting ... but sporty!
M.
