Why write an article about the "sins of the newsletter writers"?
Firstly, I know (from my previous PDAC review posts) that they always read my blog - well, when I mention them by name at least - and I do, honestly, enjoy providing people with constructive criticism that they can use to improve themselves.
But also, I'll post this in the hope that fewer people get taken in by bullshit.
Ooh, but ain't I attacking my own huggy-buddies with this post too? Sure. Probably every newsletter writer is guilty of a few of these sins. But the guys who still talk to me are man enough to own up to their mistakes, and have even made it a point to address their past errors with the aim of improving their future performance.
Which is smart, cos the way things are going, they might be the only writers left standing by the end of this year. You'd hope.
And why not an article on the "sins of the newsletter readers"? Ah-ha, clever question! It's because such article would be very short: the only sin of a newsletter reader is not kicking the shit out of the fucking cunts that stole his money.
Anyway, here are the thirteen sins of the newsletter writers. Feel free to repost this wherever you want, as long as you provide a link back to this post and blow some smoke up my ass.
And if you're going up to PDAC this coming weekend, or Cambridge House in September, or to some other stupid junior mining conference, then feel free to bring up these points with your own favourite analysts! Those who dare to show their faces....
1. Living in fantasy-land.
Some of these assclowns have been prattling on about how silver's going to $100, or gold to $5000. They've been going on like this since 2009. If you were calling for $100 silver by 2012, and we're not there yet, might you perhaps learn from your mistakes and quit making childish projections that have already turned out to be wrong?
The fact is, silver and gold and stocks do what they do, and we're forced to invest based on what's going on in reality. The minute unicorns start pooping Smarties and rainbows, you can start investing based on your fantasy-land projections; until then, assume that reality is going to continue intruding on stock performance.
2. Not having the slightest clue how economics works.
Again, as above: if there's a coming hyperinflation, why do you think miners will be able to stay in business? Don't you think hyperinflation will also hit salaries, diesel, heavy equipment and power generation?
As well: what does anyone with an Econ 101 textbook say about the gold standard? Seriously, if there's some elite conspiracy of Lizard People ruling the world, why are they going to want to destroy all wealth that's not tied to the price of gold just so they can institute a gold-backed currency for you? And where is all the gold that's supposed to back this currency?
You might as well be saying "if the Earth gets hit by an asteroid fired at us by the evil aliens from the planet Nibiru, here are the stocks you want to own".
3. Sounding like a fucking drooling assclown.
Seriously, if your politics makes you sound like a hate-fueled nutcase, then you should maybe tone down your politics. Because you're making the whole junior mining scene look like a bunch of drooling gun-happy survivalist racist apocalyptic neo-Nazi Jesus-freaks.
How do you expect sensible people to want to have anything to do with your stock picks? The sensible people have the big money: don't you want them to join you in the market? Because they usually try to avoid associating with loonies; okay, maybe not the Koch brothers, but definitely most other intelligent rich people.
Stupid people can't float your market. Quit talking stupid to attract stupid people. It makes it look as if you're not trying to make money on stocks, you're just trying to sell subscriptions to the retards on that mailing list that you bought from a Republican Super-PAC.
4. Arrogant self-assuredness in the face of conflicting evidence.
This applies to the analysts who make rosy projections which fail to come to pass: if your stupid stock pick hasn't hit your target in the time allotted, why are you sticking with it? And if the US economy has performed radically differently from how you thought it would last year, why can't you admit that you were wrong and adjust your forward expectations? If silver's not at $200 yet, why not cut back your expectations?
Your job isn't to be right. Your job is to make me money. I don't give a shit about your big theory.
Speaking of which, all you fundamental analysts and technical analysts: if you're giving me an upside target for a stock, why not also calculate the maximum downside? And tell me that too? So I can determine whether it fits my risk-reward? And so that you can dump it when your maximum downside projection is proven wrong?
5. Clamming up on your model portfolio performance the minute it sucks.
Seriously, you were so fucking proud of your 60% return in 2010 when life was easy and any old sack of shit won you a double. Why all of a sudden did you clam up about your performance the minute the junior market turned to shit in 2011? Where are your performance numbers now, smartass?
If you're not owning up to your subscribers about how badly your performance has sucked in the past two years, then either you're a weak-necked wimp, or you're an outright liar. Which of those should I go to for investment advice?
Oh, and by the way - it might also serve you well to compare your model portfolio performance to the GDXJ, or even to SPY. Because if you're not beating both of those, you're wasting your readers' time and money.
6. Clamming up about other writers' criticism of your picks.
If someone points out that there are problems with one of your picks, why not at least invite him to write a commentary for your newsletter? Or ask permission to reprint the email he sent you? And if you don't have what it takes to successfully defend your investment thesis from that sort of criticism, why not admit you might possibly be disastrously wrong - especially after your stock has already dived 50%?
Why is it wrong to let your readers know the reasons why other writers disagree with your thesis?
7. Not admitting your limitations to your readership. Or to yourself.
I admit I have no clue about mining and exploration. But if I've subscribed to your junior mining newsletter, I fucking well expect you to know it all. If you've been proven to not know the first fucking thing about how to build a mine, how to operate a mine, or what the odds are to find a deposit, why not admit that lack of knowledge to your readers and stick with what you're good at? Why keep making dismal mistakes that blow up your readers' portfolios?
Hell, if you don't know anything about mining, there's things you can do: you can read the Hard Rock Miner's Handbook, you can take a few day courses at PDAC. There are loads of educational books and video series on exploration and mining available for free on certain peer-to-peer file-sharing networks of a Swedish persuasion.
Hey, you can even quit playing junior miners entirely and just stick with something like playing ETFs using technical analysis. Exactly like all sorts of no-name bloggers do for free on the internet. But then you wouldn't be providing any value to your readership, would you?
8. Not knowing how to read a balance sheet.
I admit I have no clue how to read a balance sheet. But if I've subscribed to your newsletter, I fucking well expect you to know how. Don't hide behind that "due diligence, not investment advice, not a licensed financial advisor" crap: if you're suggesting stocks to me you'd better have the slightest clue how to read the financials. They'd better not be about to go bankrupt, or spring surprise dilutive financings on me.
And for the love of Christ, please understand that the legal disclaimer at the back of your newsletter isn't going to protect you from getting your fucking teeth kicked in by an angry ex-subscriber next time you show your face in public. Which, while illegal and unfriendly and not something I would condone, is still something that you'd have to expect to happen when you fuck over your readership so much.
No wonder so many of the old newsletter crowd aren't presenting at PDAC this year, eh? They're too chickenshit to show their faces. But they were all so butch and tough in 2010!
9. Getting suckered by frauds.
One big running joke this past year was how certain newsletter writers made themselves look stupid with Liberty Silver. These are guys who purport to know what they're doing. They got taken in.
Any newsletter writer who got duped by that scam, and who didn't get their people out the minute IKN broke the news, should fold up his tent and go back to working at Denny's. Instead of complaining to Google about posts, or deleting his own previous posts, or writing a passionate defense of the fraud on his shitty website.
10. Not calling "fraud" on the frauds.
Seriously, Bob Moriarty. You knew Liberty Silver was dodgy. You knew it when you went on the site visit. You knew the pump was on. Why did you wait til November to post about it, after IKN and I had already written repeatedly on the topic, and after the TSX and the US OTC halted it? Why do a couple rabid friendless bloggers have to stick our fucking necks out while the fatcats of the industry sit back and let people get hosed?
I know it's difficult to tread the line between legality and a civil prosecution, but Brent Cook and Quinton Hennigh seem to have done a pretty good job when they criticized a heavily-debated resource estimate a few months ago.
Why leave the policing to one rogue Peruvian blogger and a couple insane lunatics in Canada? Do you newsletter writers feel you owe nothing to the industry and readers that you've made so much money from? Do you have something better to invest in now that the Venture has been annihilated? Are you going to tell your readers that you'll be winding up your newsletter now that you've let the industry get destroyed by incompetent geos, lifestyle CEOs and outright frauds?
11. Front-running your readership.
This is aimed squarely at the professional houses. If you've already taken a big chunk of this stock in a PP, and you intend to dump it directly into the market when your 4-month holding period is up, then it is not enough for you to simply put a tiny-type "disclosures" section in your glowing writeup.
You should be required by law to tell your readership exactly how long you intend to hold the shares that you have. You should be required by law to tell your readership that you fully intend to puke your shares into the bid the minute they become free-trading. You should be required by law to admit to your readership that you're getting them into a stock which is going to get destroyed the minute you bail on them.
Your clients know where your offices are. They can look them up on Google Maps. They can show up at your fucking desk. Don't you think that it's dangerous for you to repeatedly hose retail? If you think you're safe, then please re-read points 1 thru 3 above to re-familiarize yourself with exactly what sort of people invest in junior miners. Half the people you suckered into buying a 90% loser stockpile guns and ammo and think they hear Jesus.
12. Letting management and financiers front-run your readers.
I've learned by now that if a big block of shares are coming free-trading, you need to get the fuck out of the stock and don't get back in til the front-runners have sold. As a newsletter writer, don't you think you should also be exploiting this? Shouldn't you be tracking the share structure changes in the stock that you recommend? After all, it'd help your readers make money, wouldn't it?
You're swimming with fucking sharks. Quit thinking that any of these junior mining bastards are your friends. All they want is to eat your readership. Start acting like you understand this.
13. Never dumping your losers.
Jesus fuck, there's no better way to blow out your readers' portfolios than to encourage them to stay in a stock that's already lost half its value. If I lose 50% on a position, I have to make a 100% profit to get that money back; if I lose 80%, I need to make back 500%.
You're not giving us any winners of enough size to make back what we lose on your losers. So quit blowing up your readers' portfolios. Why do you want readers to stick with losers? Why didn't you set a stop-loss point? Why didn't you keep us out of the market entirely til we could be sure it bottomed, and then get us in at cheaper prices? Isn't that what all the real investors do?
After all, if your original thesis was that this 50 cent stock is worth $1, and instead it goes to 10 cents, isn't your original thesis now proven wrong? Sure, the market might be wrong and you might be right; but why stick with a wrong market and watch all your money (and all your readers' money) disappear?
Cookie and Kaiser (and everyone with nothing new to add who have recently been repeating them verbatim in interviews at BNN or The Gold Report) can talk all they want about how the financiers or the trading bots or the Accredited Investor rules or the sad reality of mining economics have kneecapped and smothered the junior scene.
The fact is, there are a lot more people to blame.
Kaiser keeps comparing this market to the post-BreX market, and I think that's where he's making an interesting point. You couldn't trust any exploreco after BreX demonstrated how easily the system could get fucked over; so, Kaiser notes, the market went through three years of dismal hell, maybe til the BreX-inspired NI-43-101 system gave investors a reason to have confidence in the market again.
If the junior scene today needs another intervention from the government to restore faith, after all the damage that's been done, then I'm sorry but all you newsletter writers are going to be out of business. Because the first thing the government should do is slam anyone who's been offering stock picks - disclaimer or no. You'll be fined and banned for spouting off your bullshit without a CFA, a FINRA registration and a Series 86.
Frankly, that would be a fantastic thing, and if it's not the law already then certainly it should be - it'd shut up an awful lot of assclowns.
But in the meantime, a few decent stocks will continue to suffer.
Clean up your fucking act, the lot of you.