Bear Flag Blog

I visited the Motley Fool website yesterday, as I occasionally do. This isn't a recommendation, by the way, a friend is a longtime member of theirs so I check up on them occasionally, but in general they just seem like a way to advertise investment strategies that, if they worked, ought to mean those who are selling them shouldn't have to work any more.

In any case, I happened to notice that one of the dramatic movers on their front page was SQM, a company we recently invested some $20,000 in. To my shock, the dramatic movement was a 90% drop in the price, from $230-something to $23-something per share.

Oh, shit! My first thought was that there had been some scandal, with the corporate directors embezzling millions and jetting off to Bimini.

My second thought was, wait a minute, wasn't there a 10-to-1 stock split in the offing?

...

Sure enough, over at Money, the price was $23, up twenty cents. There had been a stock split and the Fool's automatic tickers were ignorant of it.

If you're looking for investment advice, and be warned you're getting what you paying for, I do recommend SQM (Sociedad Quimica y Minera):
1) They're a foreign (Chilean) company, so it's a hedge against the dollar, which IMO will just keep falling.
2) They are the world's largest producer of lithium, and as interest in electric/hybrid vehicles increases, the world's demand for lithium will keep growing.
3) They're not all that big, and I expect them to be bought in the next year and a half.

Of course, I don't know anything about their board of directors, their major competitors, etc etc. So there's a fair amount of risk - but then, there always is in the stock market. And I think the upside here could be dramatic.