Re: Robinhood Impact on LAC
in response to
by
posted on
Jun 08, 2020 10:41AM
Thanks, Pavel, for posting the S.A. article link. One of the statements in the conclusion of the article I found particularly interesting: " When the herd moves into a stock - stay out". That criticism of Robinhood investing tracking would be of interest to anyone interested in countertrend and/or contrarian investing.
Unfortunately I could not get the Robintrack data to download for LAC using the link you provided, but it does appear that there are a lot of new investors in LAC recently when I look at the Yahoo message board and see all the new names appearing on that message board.
My own opinion of popularity based investing is that it is indeed dangerous to follow the herd, especially if there is no preliminary exit plan involved. In fairness, the "Herd" isn't always wrong either so we are back to investigating the actuall merits of a company if we want to intelligently decide in a situation where the "Herd" has jumped on to a stock we also own if, indeed, the upward momentum is sustainable by the positive factors of that underlying company and the market it serves or whether the whole thing is more of a Ponzi scheme... and that remains a situtation where generalities don't always fit. Sometimes the Herd is right... and sometimes the Herd is wrong.
I appreciate the fact that there are "Pre Herd" investments in the Small Caps that are like "Diamonds in the Rough", but at the same time once they have been "discovered" by the Herd then those diamonds will sometimes turn into dust, but some will just shine that much more. Popularity based investing doesn't look at the fundamentals and doesn't look at the business plan, there isn't much thought in it and research is limited to just determining which way the wind is blowing and how foreceful the wind is blowing at any one point in time... not a very detailed, and certainly not a very good way, of looking at investing in general and in a company in specific.
You seemed to have posted the link to the SA article as a criticism of popularity based investing, Pavel. That is a criticism I have much sentiment for, but on the other hand when we look at a stock from the standpoint of countertrend and/or contrarian investing.. if we are truly honest with ourselves... we genuinely hope that stock turns into a crowd pleaser and that the "Crowd" discovers it sometime AFTER we have invested in that company, LAC being no exception.
When that event occurs then the long awaited inflection point for the Share Price has been reached and we have the best opportunity to secure a hoped for ROI. That's when the money rains, Pavel. I can't wait to have the need for an umbrella with LAC... but I also have a definite "Exit Plan" in order to get out before all the rain water goes down the drain.
Thanks for posting, Pavel. Although LAC has gone up in Share Price recently, so far this morning it looks like someone has let some of the air out of the tires... but rather than a preliminary event to a flat tire for LAC I suspect that it is just a return back to reality for a company that has no serious production.......yet.
It is that "yet" thing that keeps be invested in LAC, regardless of today's tire pressure reading. Okiedo