|A natural resource stock, purchased early in the discovery cycle, can rise quickly, providing returns that most investors would find astounding. They can go down just as quickly too!|
The main idea is to find a stock with a good story and a moderate number of shares outstanding, and take an early position, then see how the stock plays out. One basic premise is that is is much easier for a stock to go from 50 cents to $2.00 than to go from $50 to $200, even though the percentage gain is the same.
This is clearly a risky game that should only be played with capital you can truly afford to lose. Cut your losses and let your profits run.
Most natural resource discovery stocks are based in Canada. That is not a board limitation, simply a fact of modern life.