The Whites of Their Eyes
by ilene - November 4th, 2010 7:31 pm
Strategies for Junior Mining Investors: The Whites of Their Eyes
Courtesy of Louis James, Senior Editor, Casey’s International Speculator
“Don’t fire until you see the whites of their eyes.”
Most Americans were taught in school that William Prescott, commander of the colonial forces on Bunker Hill, gave this order to his men on the morning of June 17, 1775, just before the British attacked them.
Some may even remember that while the British took the hills, they did so at such great cost, it wasn’t much of a victory. The American forces repelled the British twice and were finally overwhelmed when they ran out of ammunition – an outcome that obviously concerned Prescott and provoked his order to conserve ammunition. It was vital to use each shot as effectively as possible.
I think of this often when contemplating investing, because I sometimes feel an urge to get all of my investment cash deployed NOW. I might miss the next big uptick! And even if not, modest double-digit gains are still better than money sitting in the bank. This urge gets strong when the market gets hot, as it has been over the past months – look at all the gains I missed!
But the best speculations, as Doug Casey likes to remind us, are when the perfect pitch comes sailing across home plate, cheap and with great upside. There are no called strikes, so it only makes sense to wait and swing only when it’d be hard to miss, hard to get hurt, and there’s clear out-of-the-ballpark potential.
- Key Point: Missing out on a winning pick may wound pride, but it doesn’t cost any cash. Placing hasty bets can cost dearly on both accounts.
Or, as Doug also likes to say, you can’t kiss all the girls. Nor should you try; the consequences in real life of attempting to kiss every girl you meet would be… nasty, brutish, and short.
Returning to my original metaphor, I don’t want to pull the trigger on a deal until I see the whites of their eyes – i.e., until everything is lined up for maximum effectiveness.
Or, as I’ve put it before: “Buy Low, Sell High” is a much better strategy than “Buy High, Sell Higher.”
Strategy vs. Tactics for Speculators
Speaking of military metaphors, I frequently refer to strategy and tactics in my writing. Last June, I gave a talk on strategy…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site