Just like the house you are trying to sell, or the collectible you got up on Ebay, stocks are worth exactly what buyers will pay for them. NOT currently worth $4.50 based on the bid at this moment.
Why would you pay $4.50 for a $4.50 stock. Simple. In your opinion, it will be worth much more further down the road. Why do people buy collectibles, old cars yadda yadda. Same reason essentially.
On that massive updraft to $7.05 and subsequent nose dive, the market is telling you that maybe the stock got out ahead of itself and the profit taking took over and the selling and stops etc. drove it down. Yesterday, the market decided that NOT had been driven too low and the stock reversed course again. Deviation from the mean. Standard operating procedure. Alcollard mentioned this, "oversold, lookin for a bounce" Nice call. He felt that sub four bucks, NOT was a bargain. He's a trader so he might be back out again. No concern of mine. I'm an investor with a long term view. And I think NOT will be selling for a heck of a lot more than $4.50 in the future, and a heck of a lot more than what that last person in at $7.05 may be feeling. I hope that anyone who bought north of $6 does hang on. They will prevail in time. But rollie coasters can make you feel spewish.
I don't think Alcollard was trying to scare anyone. Informed investors don't get scared.
But Fantomas, you just mentioned the two scariest words in the investing universe: "Uninformed Investors"
Uninformed investors shouldn't be here. This is no game, it is very serious business. Anyone that bought on a tip from their buddy congratulations. You will do well here. But you will get sheared in due course. Take some winnings and start buying books, takin learnin courses and read til yer eyes burn.
The "Dummies" books are a quick and easy start, and progress from there. Association for Mineral Exploration of BC has a good website and primer. I'm sure many other wise folks here would be glad to volunteer other learnin spots. Read'em and don't weep.
If you treat the stock market like a casino, remember that the house always wins.
The Trucker
