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XMFSinchiruna (27.58)

Perhaps the Ugliest Chart I have Ever Seen!

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October 16, 2008 – Comments (7)

This is a 2-year chart of ACH, Aluminum Corporation of China.

Disgusting... words fail me. I know some Fools may have green-thumbed this stock, or perhaps even purchased shares, in part based upon my bullish calls for a recovery in this stock earlier in the summer. To those Fools, I am truly sorry. As someone who saw the derivatives meltdown coming a mile away (which created my focus upon gold and silver in the first place), I feel especially lower-case foolish for underestimating both the impact of hedge fund unwindings and a near-term stall in Chinese growth.

I continue to hold ACH shares, with a cost basis in the $40s... :(  I'll be darned if I'm going to sell at these levels. These production cuts portend a semi-protracted recovery as a best-case scenario... except that shares could conceivably settle higher if we get an end to the panic and a return to markets recognizing actual valuations.

If I could do it all over again, I would have invested solely in gold bullion, and would be shifting into gold and silver miners right about now. Instead, I'll be climbing out of a voluminous cavern of theoretical losses. I still hold oil, gas, coal, and copper equities, which I'll also be holding long-term even though I see the precious metals leading the way forward in the medium term. 

7 Comments – Post Your Own

#1) On October 16, 2008 at 5:06 PM, TheGarcipian (38.41) wrote:

Chris,

I know your pain all too well. I got in earlier than you, back at a break-even price of $65.75/share, and to date have lost 84% in this rather big position in my portfolio. It sickens me too. I thought China would falter a little bit after the Olympics, but not that the credit mess would have such an impact on their (and our) economy. It's hard to imagine the stock would go any lower; then I wake up the next day to find that it has. With so many thousands of dollars lost already, there is little point in me selling these shares now. Besides, I'm already at my $3000 loss limit for tax purposes for 2008 via other stock losses. Ditto for my holdings in PCU. It's been a banner year -- NOT!

Take heart, though. I didn't get into these positions based upon your recommendation but after doing my own research. So have no guilt based upon presumptions about me and my inabilities. I too will be holding these shares for years just to recoup my losses in the last 12 months.

Cheers,
--Gar

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#2) On October 16, 2008 at 6:23 PM, nuf2bdangrus (< 20) wrote:

I got in at 23, although the charts told me to wauit until 11.  It's here.  I bought BOLT at 23.  It's at 8.  I bought BQI at 4.  It's at 1.55  MDR at 41, added more at 16.  I want to take larger positions, but have so many unrealised losses, I don't want to commit too much capital in the event stocks go lower.

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#3) On October 16, 2008 at 7:28 PM, DemonDoug (81.94) wrote:

is this the answer to my last question, lol (ie gun to your head, which miner do you buy right now?)

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#4) On October 16, 2008 at 9:37 PM, jester112358 (28.89) wrote:

I also green thumbed this one at what I believed was a good price but fortunately bought in the money option calls for Jan instead of stock which will likely expire worthless.  However, but that limited my downside loss to about 20%, much better than owning the fundamental.  Also bought FCX and PCU LEAPS at what I believed to be reasonable premiums.  I did my own research in each case and was wrong.  I believed that major de-coupling between the Chinese growth engine and the problems of the Western financial system would keep copper, steel and coal demand strong.  Obviously wrong on both points.  Very hard to find safe assets when hedge funds and other are selling to raise cash to meet collateral and margin calls.  Also, hold signficant positions in FLWT and MDR (both companies apparently have cash equivalents of over 30% of their share price but still continue their descent). I guess everyone has decided fossil energy exploration and refining isn't really required anymore?

My worst year ever and I been investing since 1985.

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#5) On October 16, 2008 at 10:00 PM, XMFSinchiruna (27.58) wrote:

Demon... see my response to your comment under the copper chart.  :)

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#6) On October 16, 2008 at 10:44 PM, MaskedMan2007 (99.29) wrote:

I had ACH in my real life portfolio and the end of 2007. I went out of the stock around 60$ when I saw that a new down trend was forming.

I don't think that this is the time to get in in the basic materials sector. But I think that chinease stocks will be great opportunities when a new bull market will be born. ACH could be avery good candidate.

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#7) On October 17, 2008 at 7:19 AM, HooDaHeckNose (95.54) wrote:

Well, I'll jump in and sob with you guys. I got in at ~ $20 and bought some more at $15. Longer term, there are far worse stocks to be invested in and I'm pretty sure that once this initial mega shock is done, foreign commodity related stocks will be far superior investments than US companies.

We can't know when the bottom is in (pretty sure it isn't yet), so we pick our spots and then live with them.

Good luck to us all, its a good time to be extra conservative.

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