Duality of Conviction
What really builds returns? Its conviction in your strategy.
I am not here to sugarcoat anything. In investing, the hardest lessons often come not only from being wrong, but from being right and failing to act. That is the duality of conviction: the difference between spotting an opportunity and actually capturing it.
I have lived both sides of that coin in at the same time in august. With Golconda Gold, I had the setup, the signal, and the story, however no conviction, and I missed a massive upside. With Zoomd Technologies, the setup was nearly identical, but this time I trusted my process, acted, and booked real gains.
I am sure a lot of market participants had this scenario come by in their investing journey.
Case 1: Golconda Gold (TSXV:GG)
The company in question is Golconda Gold, a junior gold producer operating in South Africa. What caught my eye initially was its leverage to the gold price. Unlike larger, more diversified miners, Golconda’s smaller scale means every dollar move in gold has an outsized impact on its cash flow and profitability.
Diagram 1: Golconda Chart at time I looked at it
In other words, if you are bullish on gold, this is the kind of setup you dream about: a lean operator, high torque to the commodity price, and trading at a valuation that made little sense compared to its potential earnings power.
At the time I was analyzing the stock, the setup looked fantastic:
Valuation: Deep value relative to peers and gold price at 0.8-0.9 CAD
Technical signal: I was noting that Golconda touched at the top of the channel at that time and would fall somewhere to 0.8-0.85 CAD which ultimately also panned out that way. My charts were screaming “buy” at that price level.
Macro backdrop: Gold itself was showing signs of strength, with tailwinds from a changing monetary policy environment and global macro uncertainty.
Catalyst: Earnings were set to drop and of the month, which should deliver a catalyst strong enough to ride significant gains.
On paper, this was exactly the type of asymmetric opportunity I look for.
The Opportunity I Missed
And then…it ran.
Diagram 2: Golconda Gold Chart after 0.85 CAD (+100% in over a month)
Golconda moved sharply to the upside reaching over 2 CAD, rewarding those who acted with significant gains. I watched it happen from the sidelines, shaking my head.
It wasn’t that I was wrong in my analysis. My thesis was correct. The market validated the setup. The problem was execution or rather, the lack of it.
Of course I couldn’t possibly have estimated the strength of the move, but from my perspective Golconda Gold was significantly undervalued with a good margin of safety and still is. Beyond that, Golconda Gold was caught in a perfect strom - that is increasing coverage and gold making a huge move to the upside.
Why Didn’t I Act?
This is the hard part, but also the most important lesson. Missing an opportunity is rarely about not having the information, it is about the psychology.
Looking back, here are the reasons I hesitated:
Overthinking: I second-guessed whether I was “too early.” I kept waiting for a perfect entry point that never came, in addition to that I was thrown off by the lack of liquidity.
Risk Aversion: Even though the valuation looked cheap, I let the “South Africa risk” narrative creep in and paralyze me, there are definitely risks with that Jurisdiction - but its still seen as a mining powerhouse.
Paralysis by Analysis: I kept running scenarios and tweaking numbers instead of simply trusting the signal in front of me.
Lack of Time and Focus: Time and focus can make or break returns. Back in August, my attention was tied up with other stocks, and Golconda slipped through the cracks despite being aware of the amazing opportunity. The truth is, being an active market participant demands both time to monitor setups and focus to act decisively. Fall short on even one of those, and the opportunity cost can be huge.
Well its too expensive?: By the time the stock started making its first moves, it was already seemingly “too expensive” in my head which goes completely against the facts.
The Real Lesson
The takeaway isn’t about Golconda Gold specifically, it is about execution and discipline. Analysis is only half the game. You can be right about the story, the numbers, and the setup. However,if you don’t act, it is worthless.
The best opportunities don’t wait around. They demand conviction.
Missing Golconda forced me to confront a harsh truth: whatever ones identified edge is, it evaporates the second one doesn’t have conviction or confidence in a particular case. I am not talking about blind arrogance, but the quiet trust in your own analysis and the discipline to act on it. Ultimately, it seems that I didn’t put in enough time to build the conviction needed.
Case 2: Zoomd Technologies (TSXV:ZOOMD)
In a different case I had exactly the same kind of setup in terms of potential upside and the way the market was valuing them. It is about Zoomd Technologies.
Diagram 3: Zoomd Technologies(Earnings Release)
With Zoomd Technologies, the story played out differently. The setup looked just as compelling,undervalued relative to its growth and technicals pointing in the right direction as well as clear momentum in its ad-tech business. This time, instead of hesitating, I acted. I pulled the trigger, and the conviction paid off.
Unlike with Golconda, where I sat on the sidelines, with Zoomd I executed on the opportunity and captured the upside. I entered around 1.4 CAD and was dollar-cost averaging until 1.6 CAD on the day of the earnings release.
Diagram 4: Zoomd Technologies Current Chart (September 28th)
Ultimately the stock went up to 2.5 CAD, I have unloaded my shares between 2.3-2.4 CAD booking over 50% in a short time and this ended up being a successful trade. I took the gains as I saw other opportunities in the mean time and Zoomd is not really the stock to be active with news releases which could close the valuation gap.
This is the other side of the duality of conviction: two similar setups, two very different outcomes. One missed, one realized and all depending on whether I followed through. Honestly, there is never as much to talk about your winners than the losers.
Final Thoughts
With the title “duality of conviction” I meant to convey the message that the same opportunity can lead to two very different outcomes depending on whether or not you act. With conviction, you trust your process, execute, and capture the upside when your thesis plays out. Without it, you hesitate, second-guess yourself, and watch the opportunity slip away. In investing, conviction is often the thin line between a profitable action and a missed one.
I am not sharing this to beat myself up. I am sharing it, because the missed opportunities teach us more than the successful ones. The difference between Golconda and Zoomd wasn’t the setup; it was conviction, time, and focus.
Golconda was the opportunity I let slip, Zoomd was the one I executed and that contrast is the lesson.
Execution > Analysis. That is when your edge can come to fruition.
Cheers,
Pixel Research
Disclaimer
This is not financial advice as Pixel Research content is not meant to be a substitute for financial advice. Since we don’t offer financial advice, the material provided shouldn’t be interpreted as tailored investment advice. It is crucial to carry out in-depth research and, if required, speak with a licensed financial expert before making any financial decisions.
I will definitely keep tracking, no doubt.
Take a look at Zoomd after their November report.