Riverside Resources (RRI:Toronto) (RVSDF:US) is a fairly new company with a tiny market cap near $3 million. Here’s a recent chart shown in Canadian dollars:

Riverside’s share price has been decimated in the recent global sell off. This is not an unusual chart for this sector. Please understand nothing fundamentally has changed with the company. They aren’t going away.

Riverside is an explorer and developer for gold and other minerals in Mexico, the US and Canada. Riverside owns a proprietary database that allows them to uncover very early stage exploration projects. Please look at the company website for further details (http://www.rivres.com/i/pdf/RS-onepa... ).

Riverside has exceptional management with deep pockets backing them. They will be one of the survivors of the present carnage. The business model is that of a project generator. They simply find the projects and do the early stage inexpensive exploration. Bigger companies with more capital are then brought in for the more expensive drilling and development. It is an excellent business model and makes Riverside a long term player in this arena.

If Riverside discovers an economic deposit they will trade at a multiple of their annual high of $1.45 Canadian. This is the risk to reward ratio of the sector I invest in on a daily basis.

These companies should be bought carefully, especially Riverside. You’ll get creamed if you put in a market order to buy Riverside. It doesn’t trade a lot of shares on a daily basis. Use limit orders. I typically request the “bid-ask” from the broker. For example, say the bid-ask was $.17 to $.20. The highest present bidder is $.17 so I might put in an order for $.18 if I really wanted the company.

A number of buyers could run this stock up ten cents next Monday if they were not careful. It’s better to be patient and disciplined. The stocks tend to come back to you in price.

I once won a stock picking contest simply by looking at the newspaper to see which one was down the most on a given day. Three months later...voila! ... that stock was the one that appreciated the most. Picking high quality companies being sold off mindlessly is an even better strategy.