Following this thing since 2008 (along with Radius and Miranda and some others). They are all in the same boat primarily because of what’s happening in the sector.
Any time these things have a run they always pull back huge at some point. I am not a big fan of the sector primarily for that reason, but it in no way means you can’t make money trading it. I have been in and out this and radius gold primarily. The biggest gain I had with MTO was after the aforementioned pull back - a quick flip. It wasn’t until recently (last summer) I decided to hold a basic position. The reason was that it looked like it was falling into a solid trading range with a limited downside and lots of upside. It’s basically held that range… much longer than I would like but sometimes you have to be patient with these things until they can prove themselves. I decided last summer I was going to give this company until the middle of this year to show something positive. You can see they are trying, but look at its peers -same thing different pile.
Now I have a theory… and it seems always to come true from past events. You will notice the DOW is headed for new highs. Soon all large caps will be overpriced (If they are not already) and investors will be looking for cheap small caps because of the upside potential and also to offset some of the dividend “cash” they are making from them (in case of the downside). This case will get stronger the longer we are on or at a market top. So as long as all is good in the world (which is debateable, but the market doesn’t seem to think so) this theory should play itself out. We all heard the term risk on or risk off. We have to be deep into the risk trades before these things go and that will happen as long as the markets are in a good mood. There is still so much money on the sidelines.
Now another thing about a market top is that instruments like SDS (ETF broader market shorts) start to look very cheap. Even the fear gauge is looking inexpensive. So keep that in mind for when you start to hear that the “fear” index has bottomed.
Here’s a comparison of the three Amigo’s and somebody's ex-girlfriend. It illustrates just how “unloved” this sector has become.
And a possible ex-girlfriend... JAG (same thing happens to it's value if you own one).