Should You Buy Silver Lake Resources Limited at This Share Price?

What happened to the SLR share price?

Silver Lake Resources Limited [ASX: SLR] was 2.94% up in early afternoon trading today. The stock was trading at $0.175 a share. The entire market is at risk of declining for another day. This would mark the fifth consecutive day of decline for the Aussie market. Bank shares are down again. This is not a surprise given the sector concentration of the Aussie market in financials.

You are poorly equipped to win

I can’t begin to tell you how poorly-equipped retail investors are in this market. Most retail investors rely on very simple and primitive tools to decide what they should do in the market. They often turn to simple financial accounting ratios such as P/E, ROE and D/E as their guidance. Without the capacity to back-test their decision making process, they fall victim to the harsh market realities.
When retail investors turn to the market analysts, they aim to leverage on the expertise of the analysts to make superior profit in the market. Sometimes, all the analyst can say is how good or bad a company’s fundamentals are. Yes, it is true that financially healthy companies outperform in the long run. However, that approach tends to leave the more active short term investors in the rain.

What should you do with SLR shares now?

Institutional investors such as hedge funds have a distinct advantage. They have floors of PHDs running sophisticated computer programs to create synthetic positions, dynamic scaling and portfolio optimisations.
How can you beat them? You really need to leverage on unique research from people like my colleagues at Port Philip Publishing. Currently, we are running a program that focuses on micro-caps. Those companies tend to give you consistent, large scale wins in the market. Now, that is a sensible way of making money.
I am the emerging market analyst at Port Philip Publishing. I guide my clients to invest in the highest growing companies and markets in the emerging economies. Needless to say, the results have been fantastic!
What should you do with SLR? Well, gold tends to go up with commodities in the long run. They hedge against inflation and the company is very cheap now. It is an interesting investment to contemplate.
My sincere advice to you is, before deciding on which stock you want to invest in, find the right advisory first, otherwise you are very poorly-equipped to win in the market.

Ken Wangdong
Emerging Market Analyst, New Frontier Investor


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