Fellow Frustrated Longs
posted on
Feb 20, 2008 07:07PM
Crystallex International Corporation is a Canadian-based gold company with a successful record of developing and operating gold mines in Venezuela and elsewhere in South America
I have read all of the frustrations and I sympathize. However, there are few things all of you should do right now for your own benefit.
#1 - Ask yourself if you could live with the losses if you woke up tomorrow and KRY was at zero.
A: If you can't then you need to get out of this stock right now. KRY is a very risky speculative play led by a very weak management team in an aggressively anti-western country. The potential reward is great, but the risk is that you lose everything and if you cannot afford to lose it all you need to be invested in more safe stocks.
#2 - Until KRY has a permit it has NO VALUE. Every penny invested is a speculation on FUTURE VALUE. You need to understand that before you plunk down money here. If you can't handle that then sell and invest elsewhere.
#3 - KRY is news driven and in the absence of news and the absence of any reassurance from mgt, the stock is a TRADING stock. Ignorant retail investors stumble upon KRY every day and think it will bring quick easy riches. This sends the price up a bit. WHen it doesn't happen in the short time frame they envision, they get discouraged and sell, which drags other weak longs into selling when they see the drop. We are all waiting for one catalyst, the permit. If you are not willing to put your KRY holdings into a vault and wait for that catalyst or the bust, then sell and find other safer stocks. KRY is the epitamy of the RISK v REWARD scenario.
#4 - Don't wed KRY. It is a stock and nothing more. If you want to make money, do this. Decide what you want to RISK on KRY. Take 50% of that and buy in at this level. Then FORGET about it until the day of a permit or bankruptcy. Take the other 50% and use the behavioral pattern of KRY to make money trading.
EG: buy 5000 shares and forget about them. Every morning (almost) KRY is up early then fades all day until some time between 11:30 and 2:30. LVL II will give you clues as to where the support is. Put in a buy order where you see major support. You may not get it today, but it will come (unless there is a permit PR). When you get your order filled look to the next day. Sell your shares into the morning up time. Then watch the days trading for a low point to buy them back.
This is called trading around a core. I have been scorned for doing so, but I made over $60k in 2007 doing this while buy and hold longs lost big time. Trading around a core is NOT disloyal. Your goal is to make money. The risk is that you sell for a small gain only to see the permit PR before you can get back in. But you still have that 50% core.
LAST POINT: If you are long, and you understand that this is a spec play, you are a damn fool if you sell all your shares. You are playing into the hands of those who understand what this is all about. That is why hedge funds are able to shake shares because retail gets weak, sells out, then regrets and buys back in higher only to see the same thing happen. If every LONG held onto their core positions and forgot about them until they blow up or down, then the manipulation would not work.
Hold your core for what it is and DO NOT SELL. If you want to make money in the meantime, trade around your core. If you can't handle this then sell now and forget about KRY. You will never get a big reward if you can't risk a big loss.
I've done this over and over with many stocks. I've made big money on some risky stocks and lost everything on some bad ones, but I know what I'm getting into and I do not wed my stocks. In the end, my gains far outweigh the losses just as I have experienced with KRY.
Bottom line: Understand what KRY is and why you are in it. If you can't handle the risk you will not receive any reward.
Good luck to all.