Found an old post from coach.

If you bought seg at 5 cents you are now more than double.

He is right about buying at rock bottom, more bang for your buck.

Ecu could be at it's rock bottom here considering it's potential.

"I met a number of people in recent years that made millions of dollars early in the PM bull market, buying distressed juniors for pennies and then riding up the recovery. One of these guys owns more than a million shares of ECU that he bought at 1 cent. Now in hindsight it seems like an easy move, especially for someone like myself that bought a few thousand at 20 cents. I mean, I would have owned 20 times as much if I was buying the same company just a bit earlier in the cycle...

Hindsight has a way of distorting results. Things are always a no-brainer when we have the benefit of knowing how it all would have worked out. So I have been looking hard at the sector lately and trying to figure out what the next 100-baggers will be.

Given that we have so much fear and doubt in the market today, I think many juniors are bumping along at rock bottom levels right now. For sure some of these companies are not going to survive, and no matter how cheap they get, they will go to zero eventually. But some of them will survive and perhaps set the framework for million dollar profits.

I think SEG has that potential. I was comparing the stock to ECU (another junior I have owned for years that is also a paid advertiser on this website). ECU hit a low of about a penny, at a time when metals prices were low, the mine was shut down, the company had limited cash resources, there was an overhanging lawsuit, and ECU did not even own their property. The big upside was represented by strong management and excellent discovery potential.

For SEG, we also have excellent management and discovery potential. There are also big risks, in a weak treasury, low metals prices, and a mine that is temporarily shut down due to poor operating performance. The stock can be bought in the market for about 5 cents, and there are fewer shares out than ECU had in 2002 so the market cap is similar.

Overall, I think SEG is a stronger company now than ECU was at the time, and I think the metals outlook is stronger today than it was in 2002. Given that we have a published resource of more than 30 million silver equivalent ounces, and many promising high grade intervals that have not been included yet in that resource, I think SEG has strong intrinsic value.

The market climate is a big wildcard now. The resource sector is probably due for a bounce, but the entire market structure is threatened by the overhanging debt and credit issues. Even the most fundamentally sound companies will not perform if the entire market is collapsing.

The other big wildcard is how long will it take for metals to bounce. The clock is ticking. Any junior, even those on care and maintenance at their operations, will burn cash. The longer that things are on hold, the more cash that is required to survive. Cash is hard to find right now. So the issue of even one more year of weak metals can kill a company that is thin in the treasury.

I would say putting $10,000 into SEG today will carry the risk that the entire investment could be wiped out. That is a fact that an investor must be aware of. On the upside, I could see potential for SEG to secure funding to last out the crisis, and a rational expectation for silver to go to $20 or higher in 2009 could be proposed. Under that scenario, the mine is capable of generating a profit and the company would become self-funding. The exploration and development work could resume, and a larger resource could be proven up. With the risk of insolvency removed, plus the increased asset value of a larger resource, SEG could recover to $1 or more. Or, it could be taken out in a merger or TOB that would generate a net gain for investors either way.

On balance, if we put a 50-50 probability on the unknowns, we could assume 50% chance of total loss, and 50% chance of 20 times the original investment or more. Risk tolerant investors will be placing bets on juniors like SEG with the knowledge that those that survive will likely offset all of the losses from those that do not.

I do not know if SEG will ever reach the kind of gains that ECU delivered. I am just saying that it could. I am biased, in that I have owned the stock for years and have recently bought more shares. I respect the management and have benefited from their support of this website. I have toured the mine and believe the project is viable and carries strong potential for a big deposit as exploration continues. I think the rewards justify the risks, and that is my personal opinion.".

cheers!

mike