Friday, January 17, 2014

Not the Time to Get Out of the Sector

Yes, you are always prepared to take losses. That is just the nature of our business. Lots of stocks will lose money – in fact, I might lose money on half of the stocks I choose. Of course, the other half can go up by hundreds of a percent if I am right. This is the nature of investing in small to mid-sized businesses. Some of them run afoul due to problems with their projects, and some run afoul due to the market. They can also fail due to government interference or environmental problems. So there have been lots of situations where we have taken losses on stocks.

When you talk about taking losses, you mean that you would be selling one thing to buy something else. Either way, I certainly would not recommend, if somebody had seen a decline in their portfolio of 50 percent, that they sell their positions right away. They may want to sell a stock to buy another, but I certainly would not be selling everything and getting out of the sector here.

- Eric Sprott: