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I'm sure you have heard of this term, 'stink bids'. They are but
one way of insuring a low entry price in some of your favorite junior mining
companies.
Whenever I hear the term I always think of Doug Casey, Casey Research which is where I recall learning about them years ago.
Many of the junior mining shares are thinly traded and they
frequently have large spreads between the bid and ask price. This situation
actually sets up the opportunity to place 'stink bids'.
Say you have a favorite stock or perhaps a warrant which you
want to buy but the price has risen substantially. You still would like to
purchase the shares but being a savvy investor you don't want to chase the
price higher.
Each of us may pick a different ideal entry point based upon our
respective analysis and review of charts, etc. at which point we decide to
enter a buy order at substantially (25% - 50%) below the current market
price. Thus, a 'stink bid' is what we enter in hopes of a sharp market
decline in the shares. Thus we are there with our 'stink bid' to capitalize on
this, at least, short term imbalance in the trading of the shares.
Personally I prefer to use 'stink bids' only after I have
established my core position in the shares or warrants. If you do not already
have a core position you may never have the opportunity to buy the shares if
they just go up, up and up. So, first get on board with a nice core position
and then if you would really like to own substantially more shares, then a
'stink bid' can be very useful.
Currently, I have a few 'stink bids' out on some of my sleeper
shares and warrants. If I get an execution on my 'stink bid', great. If not,
well, I already have a nice position and am contend to ride with my current
holdings.
For those readers unfamiliar with our services:
- PreciousMetalsWarrants.com
provides an online database for all warrants trading on the natural
resource companies in the United States and Canada.
- InsidersInsights.com
tracks the buying and selling of corporate insiders with a focus on the
junior mining and natural resource sectors. Buy and Sell Alerts are
issued as deemed relevant based upon our analysis.
We encourage all readers to sign up for our free weekly email.
Dudley Baker
PreciousMetalsWarrants
Also
by Dudley Baker
Dudley Baker is
the owner/editor of Precious Metals Warrants, a market data service which
provides you with the details on all mining & energy companies with
warrants trading on the U. S. and Canadian Exchanges.
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