This is pretty embarrassing to admit after banging on about the importance of doing your own research and the forming your own opinion, however I have recently fallen into the trap myself.
I have been following a stock, Northern Star Resources (ASX: NST), for a while now and was considering taking a position. In my opinion it is a well-run company, that has managed to turn an unwanted mine into a good little cash cow. That said there are a number of risks that I have to consider including the fact that the mine life of their Paulsens project is unknown and their Ashburton Project is pretty much 100% refractory ore, which makes the recovery of gold harder.
Anyway, as I was saying, I was considering taking a position in the company but my research indicated that future growth could only be achieved through an increase in the gold price, a sustainable mine life at Paulsens or further acquisitions. I discussed my research with another poster and it was only now that I can see that I placed too much emphasis on that discussion. My opinion was swayed and I decided to cease researching the stock. At the time it was trading around 58 – 60 cents (which is where it is currently at), however a couple of weeks back it dropped to the low 40’s which would have been a prime buying opportunity had I kept on top of the game.
Furthermore NST has made some recent announcements which are very significant for their Paulsens project, with the potential to alter my valuation. In my mind as long as Paulsens continues to pump out the gold this company is going to be in a very strong position. So I have admitted my mistake and maybe I have missed the opportunity, but I am going to pull up my notes and do some further research. Who knows it may be part of the portfolio shortly, it may not.
As always please do your own research and consult a licenced financial advisor before making any investment decision.
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