'Strike rate' of exploration stocks

[tothemax6]

Hi All,
Have a question about exploration stocks. I understand that they are highly speculative because the companies could simply fail to find anything useful and then go bust. So my question is, what is their strike rate? That is, about what percentage of them simply find nothing and you loose all money invested, what percentage break about even after say 3 years, and about what percentage 'strike gold' so to speak, and make huge gains?
Cheers!

 

[tothemax6]

Bump^
Anyone have any experience with exploration stocks?

 

[KurwaJegoMac]

I haven't heard of any statistics that could provide answers to your questions. However there is a reason why those stocks are priced so low - there is significant risk tied to those stocks. Yes they can make spectacular gains, but because they're so risky they're priced so low. From that you can infer that the 'strike rate' would have to be very low - otherwise a lot more people would be buying those stocks.

 

[Sean K]

I think you are looking at exploration stocks in a gambling sense. True gambling is when you have no influence over the outcome of the 'bet'. You just take the odds that are set without consideration of any underlying factors that could influence the result. Professional gamblers, and traders, take educated bets on a result due to long time study and assessment of the market and a stocks potential according to many many factors. Both fundamental and technical. A company with a tried, tested and successful management team searching for gold in Ghana in Birimimian Green Stone belt along strike from a major deposit have far more success than my dad with his metal detector walking in a random field outside Bendigo.

 

[tothemax6]

I think you are looking at exploration stocks in a gambling sense. True gambling is when you have no influence over the outcome of the 'bet'. You just take the odds that are set without consideration of any underlying factors that could influence the result. Professional gamblers, and traders, take educated bets on a result due to long time study and assessment of the market and a stocks potential according to many many factors. Both fundamental and technical. A company with a tried, tested and successful management team searching for gold in Ghana in Birimimian Green Stone belt along strike from a major deposit have far more success than my dad with his metal detector walking in a random field outside Bendigo.

No not really, more looking at it in a speculative sense. Its true that the better the explorers are, the better techniques/equipment they have the more efficiently they can explore (so they spend less for more exploration) etc. But they still have to find something, and I was wondering if anyone knew the rate at which they do?
Cheers

 

[Market Depth]

It would be nice to know. I don't specialize in them though. They do 'Pop up' every now and again whilst scanning for trades, I generally leave them alone, much better outcomes elsewhere. If I do like what I see and read, then further consideration is given. I only have room in my portfolio for a max of 3 of these trades at any one time and only allocate 2% of capital to them. That way if I loose a bundle on a terrible 'Gap down' with low liquidity, it doesn't hurt me. I'm pretty quick to cut and run if things turn against me. If they work out, and head north, I'll manage the trade as i do with any other, and try and get the most out of it.