Ask Colin

Yesterday I bought Lihir Gold at $1.14 and today it fell to $1.04. What makes this stock fall so quickly?

If you have been following Lihir Gold for some time, you will know that it listed just above $1.80 in 1995, nearly reached $2.80 in 1998 and fell to almost 50c in 2000. So, the movement you are talking about is very small in the scheme of things. In fact it looks to me to be a perfectly normal correction in an established uptrend.

Stocks fall because the sellers are more eager than the buyers. I notice that two weeks after you sent this question (I never respond immediately about current situations because I cannot advise you about investment or trading decisions as set out on my web site) Lihir Gold is selling for more than you bought it for. I hope you have many more of these problems!

Seriously, though you do not seem to know enough about the markets to be trading or investing without help. I hope you are using a full service broker or other licensed and experienced adviser to help you. Before you trade on your own, you need a lot of education. See my web site for information on education, however, the two prime sources are the Australian Stock Exchange and the Securities Institute of Australia.

These remarks are in no way to be taken as advice to buy sell or hold Lihir Gold by you or anyone else who reads it - they are offered only to help you better to understand the way markets fluctuate.

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