On fire!

I've gotten off to a fantastic start so far this year. In times like this it's easy to fall into the overconfidence trap. I can't help but feel a little euphoric but I've been doing this long enough to know that this is a no no and so I've told myself a few times tonight to "shut the fuck up...you're not as good as you think". I've taken a look at my holdings to see if there is anything that needs to be adjusted tomorrow and I may just take a few off the table with bev.to if it gaps up. I will not depart with my core position in that stock given that it just made a fresh 3 year high, is still fundamentally cheap with great earnings to come down the pipe for at least 3 quarters. Another of my holdings gdc.to has just broken out from a nice base and should go at least to about $3 before running into resistance where I may take a few off the table. Fundamentally that stock should hit at least $4 this year.

An interesting play I've taken a position recently is ggc.to. This is a silver mining company which has a mine in Mexico. It got shut down in 2008 due to an illegal roadblock by ex employees. This combined with the financial meltdown caused the stock to get crushed from about $4 to 0.22. That roadblock was successfully removed in December and with silver prices strong, the stock is very cheap and has catalysts to bounce back sharply. They do need to do a financing to restart and expand the mine and I'm sure they would like the stock price higher to do that. The stock is also attractive for a takeover. The company appointed a new chairman of the board last year who subsequently purchased $50,000 of the stock in the low .30's. Insiders hold about 20%of the total shares which is good. One issue the company has is its debt load - it's rather high but not serious enough to be a going concern threat. I doubt very much they are just going to sit there with this quality mine and do nothing....I suspect there will be significant news coming.

But the most promising thing about this stock and the thing that is always number 1 on my list is how the chart looks like. If the chart is crap I don't care about anything else and the chart here looks good.



The stock looks to be creeping up from a nice base and a breakout looks immanent. With silver prices so strong it's just a matter of time. Remember, this stock was once $4 when silver was $14. It's now about 33% higher. Therefore, it's not too much to ask to see this stock go to $1.50. If you play stocks like this be careful because they are thinly traded and there's a lot of noise volatility which makes the use of stops ineffective. Simply risk what you can afford to lose or scale into positions.