When you’re trying to put together the world’s biggest small share portfolio in the pursuit of shareholder activism, a market correction would seem to be a good thing because of the buying opportunities it presents.
However, with the market down another 3.3% this morning, I’m starting to get nervous. Having set about forty different buy orders for $500 share parcels at an average price 5% below the previous close, it was a surprise to come back from a meeting yesterday to discover I was the proud owner of 20 more companies.
I’ve now poured $48,000 of cash into 94 stocks since the Macquarie Fortress bombshell dropped on 30 July and by chasing the market down it means the losses are mounting on what is now a 400 stock portfolio worth $149,329. The paper loss is currently $8,537 before considering more than $10,000 in brokerage costs.
The mining mid-caps are getting absolutely hammered as the bubble bursts in similar scenes to the April 2000 tech wreck. Having dropped $30,000 of my wife’s money in that episode, it’s starting to feel like de ja vu.
The following stocks have already delivered 20%-plus losses and are worth less than $400, most of which happened in the past fortnight:
Ausenco, Aditya, AED Oil, Alliance Resources, Amazing Loans, Capral Aluminium, Cougar Energy, Deep Yellow, Energy World, Flexigroup, Fone Zone, Gloucester Coal, Gindalbie, GPG, HFA Holdings, Jackgreen, Keycorp, Lion Selection, Metabolic Pharmaceutical, Mariner Financial, Mt Gibson Mines, Monadelphous, Moly Mines, National Leisure & Gaming, Pan Australian Resources, Poseidon Nickel, Perseverance, Queensland Gas, Riversdale Mining, Silex Systems, SP Telemedia, Technology One, Toro Energy, Thinksmart, Territory Resources, UXC, Western Kingfish, Wotif.
A classic case in point is a stock called Marion Energy, which has oil and gas projects in the US and closed last night at $1.05, well down from its June peak of $1.64, but still capitalised at a respectable $286 million.
I put a buy order on at 95c this morning, got filled pretty quickly and by midday the stock was at 80c, down 24% for the day.
Fortescue billionaire Andrew “Twiggy” Forrest is another classic. He became chairman of gold and nickel explorer Niagara Mining in April, changed the name to Poseidon Nickel and saw the stock soar from 45c to more than $3. Today it’s down another 8c to 80c and my $500 investment is worth $250.
Be careful out there folks, it’s easy to get burnt as the speculative resources bubble bursts.
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