Argo Blockchain (LSE: ARB) has had a volatile 2021 so far. So where will the Argo Blockchain share price go in June? Now that’s a question, isn’t it? And I’ll give you my answer up front, right here: I have absolutely no idea. So if that’s all you wanted to know from me, you can stop reading now.
But I hope you won’t. I hope you’ll stay with me while I explain why I don’t have a clue, and why Argo is in a class of shares that I would never buy. Sure, by not buying Argo Blockchain shares a year ago, I’ve missed out on a 3,700% profit. And that’s even after the stock has lost 55% of its value since its peak in March.
But a year ago, I didn’t know anything about it. And even if I did, I had no way to guess at what was going to happen to the Argo Blockchain share price. Like almost everyone else, I only learned about the company after the shares had started soaring. And if I’d bought then, I’d have had every chance of getting in too late.
Is Argo Blockchain different to any other stock?
Now, not knowing where a share price is going is nothing exclusive to Argo Blockchain. But at least with most stocks, we can have a clearer forward view. For example, if I buy a FTSE 100 dividend stock, I expect to keep earning dividends over the long term. I’ll also hope for share price appreciation, but that’s a bonus. The reason I have such expectations is that I can see a company’s earnings. For companies producing essentials, like food, energy, raw materials, and the like, there’s pretty much a guaranteed long-term demand.
But what about the Argo Blockchain share price? That’s dependent entirely, 100%, on the price of Bitcoin. And I have absolutely no idea where that is going either. Will it soar and beat its past highs? Will it enter a lengthy slump? What will Elon Musk say about it next? How can I possibly answer any of these questions? All I know is that if I can’t guess at the answers, I won’t buy the shares.
The Argo Blockchain share price rise is nothing new
The Argo Blockchain story repeats something I’ve seen time and time again during my investing career. A new growth stock appears, typically a technology one. Investors buy and push the price up, usually to valuations that can’t be justified by current revenue and profits. That’s usually because there’s little of one, and none of the other. The price almost invariably tops out and falls, just as has happened to Argo Blockchain in 2021.
But what happens next? It will either be a washout and completely collapse. Or it will recommence its upwards climb and go on to ever better things. Which trajectory will the Argo Blockchain share price follow in June and beyond? I’ve already given my answer to that. And because I have no idea where it will go and no way to work out a rational valuation, buying for me would be a pure gamble. And I don’t do that.