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Goldfield Corp. Message Board

  • bu7542003 bu7542003 Jan 28, 2013 5:33 PM Flag

    The Anatomy of a Climax Run

    Last week I warned about a Climax Run in GV. I said these usually last 2-4 days then collapse completely. I sold after day 2 for a nice gain but I missed days 3 and 4 of the climax run and it went as high as 3.58 so I lost the final 20% of the frenzy. I no longer feel bad, as on day 5 it churned (went nowhere on massive, massive volume), then on day 6 it plunged, it tried to rally on day 7 but the best it could manage was to churn and then today it plunged. Based on past history it will now go on to lose 60-90% of its high price over the next few weeks.

    Lesson to learn from this, you don’t necessarily sell a stock if it meets your sell target as long as the fundamentals are ok. However, once it goes into a Climax Run (which is defined as a stock that has gone up a lot already over an extended period of time but then starts going straight up on massive volume, especially if it gaps up at the open on one of those days, it is going to end in 2-4 days. I sell on day 2, I don’t push my luck with days 3 and 4. Sure you sometimes lose the last 20-25% but it is not worth the risk.

    Again, I am a purely fundamental investor and ignore all charts and so called technical chart analysis, but this is the only exception and you all need to be aware of this phenomenon.

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    • Butthead what were you saying about a climax run. One thing about investing sometimes you just have your head up your #$%$ but alls forgiven. I watched QCOM go up a straight line for over a year and top it with a 4-1 not 2-1 4-1. I don't know where this stock is going but my advice don't give advice.

    • If you are strictly fundamental, I hope you're buying back your sold shares today around $2.55. The bottom line is, GV posted $.10/qtr fully taxed last qtr for the last few qtrs, and has guided for at least $24M in revenues for the Dec qtr. That will likely culminate to around $.12+ in EPS for the Dec qtr. Thing is, although most of that will be from CREZ, it goes to show GVs potential. That is, with continued revenues at this rate, they can post $.10/qtr+ going forward- likely more like $.12-$.15/qtr.

      The only reason the stock isn't $5+ already, is the concern that CREZ is it. However as I've said before, with insiders buying over $2, all the recent equipment purchases, and knowing that the electrical construction sector boom is in it's infancy, it's sure does seem prudent to believe GV will get a piece of the pie. Best,

      Dalton

      Sentiment: Strong Buy

    • Your analysis right on the money. Thanks.

      Sentiment: Hold

      • 1 Reply to peerguy_2000
      • Definitely not buying it back. The fundamentals are also falling apart. The contract is winding down and they have no new business to replace it. When the contract ends. EPS will go from 0.10 per quarter down to 0.02 per quarter. Ten times earnings of 0.08 is 0.80 per share and that is where the stock will fall. I sold during the climax run but I never short stocks. However, when Climax Run end the stock typically loses 60-90% of its value. That puts the stock in the 0.35 to 1.45 per share range the mean of which is guess what, the 0.80 per share range the fundamentals say should be at. Run for the hill while you still can and don't come back until and if they company announces a big new contract.

 
GV
1.77-0.03(-1.67%)Apr 20 4:02 PMEDT