As regular readers know, I’m very bullish on the minerals essential to the new energy paradigm. Vanadium is becoming one of those. In my last edition of the Casey International Speculator, I recommended shares in an exciting Nevada vanadium play, Cornerstone Metals (CCC.V), at C$0.37.
I knew at the time that I would be turning the reigns over to Dave Forest, a geologist I’d worked with years before and had always thought highly of. So I asked Dave if he liked vanadium before I made the recommendation. I didn’t want to get readers into the stock only to have Dave sell it a month or two later. But Dave was on board, so I went with it. That was March 21, 2018. On May 30, 2018, the stock hit C$0.90.
That’s a 143.2% gain in just over three months.
I’m very happy for my former Casey readers—but I hope they took profits.
Let me stress that properly:
I HOPE THEY TOOK PROFITS!
Since I don’t work for Casey anymore, I can’t tell them that’s what I would do. Even though the stock is down to C$0.74 as of last close, that’s still a double. Taking profits now means they can get all their initial investment back, and still have just as much exposure to whatever upside remains in the play. Given the extreme volatility and unpredictability of junior mining stocks, there is no question that for those who can, taking profits is the smart thing to do.
Don’t I like the company anymore?
Sure I do. I think it’s a great exploration play. I think the deposit is likely to get bigger—maybe a lot bigger. I might have bought the stock myself when I could (after leaving Casey Research) if it hadn’t risen so high already. And I remain bullish on vanadium.
But… There is always risk in exploration. There’s extra risk when the commodity is an oddball metal with a tiny market, like vanadium. I can’t count the times over the years when a promising speculation took off like a rocket initially, only to fall back to earth after some setback, leaving nothing but a crater full of ashes of shares and money.
Going risk-free is absafragginlutely the right thing to do when a stock like this goes vertical.
My habit of taking profits when I can was a major factor in how my past performance consistently beat the relevant market indices and benchmarks.
It’s also how I managed to sleep at night, and why I still have any hair.
And it’s most definitely how I intend to act, now that I’m on my own and again and putting my own money into the stocks I like.
But if I’m still kicking rocks and picking stocks, why do I call Cornerstone my “last” recommendation?
Because it was a recommendation—my last one in the Casey International Speculator.
I no longer make recommendations.
I act. I buy what I like. I take profits when I have them. I sell when it’s time to get out. And I document these activities and their results in my newsletter, the Independent Speculator.
My message today, however, is simple: don’t get greedy.
Successful speculators take profits and go risk-free as soon as they can.
Period.
