Wednesday, September 17, 2008

A Disappointing Update

I haven't blogged much lately. I've been somewhat depressed and embarassed by my current situation. My current holdings have declined by as much as 50% - currently sitting at 45% - from their book value. Add to that a screw up with my FNX puts - I could have made about $2000, instead I panicked and sold off at a $450 loss. Such is life.

Basically, for the first time since I started, my losses on currently holdings have outstripped my gains on closed positions. I haven't done the math yet - I'm a little scared to - but I figure it must be over $1000 net, which isn't insignificant to me. I've also had some financial interruptions elsewhere, meaning I've had to pull out some cash from my investment funds, making it an even bigger problem, because I'm not in a position to buy more at what I consider to be massively discounted prices.

But I remain optimistic. Wavefront (TSX-V:WEE) recently made an announcement that they now have purchase agreements for 106 tools. Their break even point is estimated to be between 100 and 110 tools, so once the installations are done, they'll be pretty close. Their news release figures all 106 currently on tap should be installed before the end of the calendar year, making 2009 a big year for Wavefront.

First Majestic (TSX:FR) has declined along with the price of silver. Again, a company that is increasing production, and I figure that in the not too distant future, they should be on solid ground even at reduced prices, so it seems again to be a mistake to mark them down to the extent that they have. These two holdings - the only two I currently have - are very different. Wavefront has a patented technology, so they're able to set the price and it doesn't change, it's just a matter of making the sales, which they seem to be doing, albeit slowly. First Majestic produces a commodity, so has no problem making sales, but is at the mercy of the market for how much they can charge.

As a result, I've been unwilling to sell off at reduced prices, because I sure don't want to be sitting on my cash when the rebound comes. That was my mistake with FNX - I let my fear induced by current price movement to talk me out of my holdings, and as a result missed a big opportunity.