Thursday, July 2, 2015

Risk reward

Many investors talk about the risk/reward opportunity on many stocks.

Is it a low risk time to buy something that can provide a very large reward in the future?

That is the key driver for many investment decisions.

The CAD$ (Canadian) is declining recently versus the American $$.

This puts pressure on the Canadian stock market as a whole as foreign investors are not only liquidating Canadian bonds, but also Canadian stocks and that is one reason why the Canadian $$ is going down. This money being liquidated and transferred into US $$'s or other currency.

The Canadian market, even though it is part of the G7 committee, is still quite small...so when something like this happens, it can be significant.

Bring in Chidliak and Peregrine Diamonds.

The stock has pressure on during this past couple of weeks. It is basically been declining.
Many stocks (junior and senior alike) are also having this same decline.

Money is slowly leaving Canada at this time for many geopolitical reasons as such.

Where does risk/reward come into the picture?

Peregrine Diamonds is not immune to this and the retracement in the stock adds more purchasing power for the investor in Canada. For foreign investors or US investors, they even have more purchasing power because CAD $$'s are even cheaper. More purchasing power means you can load up more shares for the same amount of $$'s and therefore can expect more reward at the end of the day. Or at least the potential for significant rewards is there and is cheaper to purchase. This also means less risk.

Chidliak has diamonds in the ground. These diamonds are significant above the operating cost to extract them. A huge profit margin exists. These diamonds are valued in US$$'s as are most rough diamonds worldwide. So, when the CAD$ decreases in value, these diamonds in the CAD$ terms actually increase in value. This increases the profit margin and leads to lower risk for the project.

At this point, the risk is lower and the reward (per investmen $) is higher.

This is a very opportune time to utilize risk/reward in an investors favour and make the plunge.

Unlike many other mineral projects out there that may be in the same boat, this project is an active project with drills turning, $$'s being spent directly into the project, etc. That is a must have when deciding on where and when to invest.

Summer doldrums is also a phenomena as a cycle and that means a correction to the upside should occur come end of August/September and this will be the same time summer results from many field programs come to flourish.

Investing in Peregrine Diamonds is the only way to gain a % ownership of the Chidliak diamond district.

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