Club Mulgoa

Monday, October 31, 2011

How to buy shares

There were often times when I could say these are the shares to buy... and expect the prices eventually to go up.

Not at the moment. The fundamentals, the logic and the financial news have no bearing on the short term movements of most stocks. Hence, I don't know how to evaluate the short term prospect of a stock. What I buy now are mostly based on long term value and long term prospects. But they may go down during the short term. Because of so much uncertainty and so much whimsical behavior by fund managers, I don't even want to touch too many shares. Selling is even more difficult.

Many gold stocks when it was below USD$1600 per oz but rising towards USD$1900 per oz, are now lower in price when POG is over USD$1700 per oz. POG has found a floor at just above USD$1600 per oz.

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