With the markets down over 3%, XJO currently down 3.1%, Penrice Soda (PSH) is showing strength up 2.6% or 1 cent to 40 cents. A non-executive director, Andrew Fletcher, bought 50,000 shares last week at $0.395, increasing his holding by 73%. I take recent strength and insider buying as two signs that a bottom is forming in Penrice.

Despite still owning a position in Penrice with a cost basis of $0.80 and the shares now selling at $0.58 I fell OK. Not because I have a lot of faith in Penrice, but because I was correct in changing my opinion. I’ve found that once I’ve established a position I tend to become married to it. I find it difficult to re-evaluate positions in an open, honest and fresh way.

Here’s a good summary of Chinese bubble and why miners are will head lower, by Roger Montgomery. It’s based around coal due to the current M&A in that area, but does extrapolate to all miners.
In summary, China property bubble bursts, Chinese Government lowers the current 55% contribution to GDP occurring through build-out of infrastructure, demand falls, miners fall.
My view is that secular cycles last longer than most predict and commodity cycles can last twenty years, so I’m sitting on the sidelines waiting for the eventual fall to start rather than wasting …

I’ve finally got Google chart setup with defaults I like, below is an example featuring Penrice Soda Holdings (PSH.AX).
I posted about Penrice falling into my strike zone on the 8th, that’s the middle highlighted bar. On the 7th shares were allocated and the stags started to sell. I wrote the following on the 9th, but decided not to post it as I see too many posts on message boards worrying about small gyrations in share prices.

Penrice Stags selling their additional shares
Is a likely explanation of the current share price.
The additional shares …

With new bi carb capacity now online and all but accounted for its time to see the cash flow and earnings pop.