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Jim Letourneau's Blog

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Gory Details Don't Matter


Strathmore Minerals Intra-day (5 minute) Chart Posted by Hello

I was contemplating buying some more Strathmore Uranium (STM.V) and I noticed some odd short term trading action. I thought I'd document my interpretation of what I saw. Your mileage may differ.

Even using a discount broker exposes you to stiff transaction costs on cheap stocks so short term activity is rarely actionable. Besides, what does a Big Picture Speculator care about 5 minute charts anyways?

You can see from the news release that Sprott Asset Management Inc. has purchased $2-million worth of STM.V shares at a price of 70 cents. They now own ~20% of STM.V.

Given the recent run up in uranium companies it was anomalous to see this big downward volume spike in STM.V. However the private placement was announced after the close today. Retail investors get irritated when they see big money get in at 70 cents while they are forced to buy at +90 cents. They had to smack it down for a few hours.

Life isn't fair. If a person is upset by this sort of activity they can always join the winning team (NOT ADVICE - don't buy investments without first consulting your financial advisor).

There are 2 "Big Picture" conclusions from all of this rambling. Firstly, the big slug of STM.V stock that was sold hard for sale yesterday afternoon was unlikely related to any bad news. Secondly, it is a good idea to track the holdings of specialized firms like Sprott Asset Management. Since they are responsible for large sums of money, they have the resources at their disposal to find out more about these companies than a retail investor can.

Not Advice
Courtesy the Big Picture Speculator
I currently own STM.V