IKN

saucy doubts and fears

Financial advisory

So I get this mail on the back of that last post about NGD, short and sweet from reader “F”. Here’s the pay dirt line from the mail…
“…O.K. then Otto, name a cheap miner on fundamentals…”
…which is a fair enough question I suppose, but to answer it well I need to know more and that would go something like this:
O: “Depends on your risk profile”
F: “What do you mean?”
O: “I can name a company with really cheap fundies compared to its price, but there’s also execution risk.”
F: “Oh, I don’t mind taking a risk.”
O: “What, you’re fine with putting down $100k into a 20c stock and potentially losing 70% of the cash?”
F: “Ah well, I didn’t mean that!”
O: “So what did you mean?”
F: “Well for me, taking a risk would be….” 
And then F goes into her or his spiel about their idea of a trade, how much money they’re willing to invest, what sort of lifestyle they want to keep up (and eventually improve if successful), their age, marital status, offspring, responsibilities…all that stuff. And then, after listening to all that I’ll have a better idea of the parameters and would be able to suggest an investment in the junior (or even senior) mining world which would suit their circumstances. But I’m not going to do that. Because I’m not your financial advisor and I don’t want to be, either. For me, putting all your stack into one tinycap junior would be complete madness, but if you’re total net worth stack happens to be $5k, you’re 24 years old, single, no big financial liabilities, can live happily on your monthly paycheck and if you lose your five grand you have oodles of time to build another bankroll then hey, who the hell am I to judge? For you the mere fact I own junior stocks may be madness, then again it’s highly unlikely you know much about my circumstances. And why should you care, anyway?

What to do then? One of two things:

1) Hire a real financial advisor.
2) Work it out for yourself.

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