One of my biggest mistakes.

Good morning again,


I'm writing this with one eye on a live graph on my other monitor, so I apologise in advance for any awful spelling, punctuation and or grammar issues.


Probably the worst trade to date that I have ever made was in a company called Armadale Capital. Without going into excessive detail, they invest in other companies within the natural resources sectors, such as Mine Restoration Investments in South Africa along with a few others.


My mistake here was failing to do a full check on the board of directors and also forgetting that the sector is very slow to evolve. It's because of this that I've added to my trading rules the following line: "Do not invest in the natural resources sector - it will take you an age to get your money back".


My failings to profitably trade this company doesn't mean that the company is bad. In fact, it has many aspects that I think are great: the low cost Mpokoto Gold Project in the Democratic Republic of Congo and the low cost fine processing and recycling plant that's a branch of Mine Restoration Investments. I made the mistake of thinking that some quick number crunching from me and a realisation of a distinct difference between the value and price after doing this would make the share price soar.


The share price didn't soar - in fact it fell almost 35% and I closed out that position with a hefty loss (for a nineteen year old).


I think that for me what caused the downwards pressure in the share price was that the Board of Directors had a tendency to release "media updates" that in hindsight were effectively unable to tell shareholders anything new. This combines with their very high salaries gave the impression to shareholders that they weren't pulling their weight properly. I felt like even more of a tit after this trade because I had been given a warning about the board of directors before - albeit on an internet forum.


I learnt a lot from this position:


1. Look for proof of a good consistent board of directors - emailing them first about something arbitrary and seeing if they reply is often a good indicator.


2. Natural resources are a slow evolving area and you'll find it hard to make profits actively trading these companies (although doubtless many people do).


Good luck trading,

The Masked AIM Trader