Sunday, February 16, 2014

Some Sunday news

I'm slowly getting better, except for a nagging lung infection that makes fizzy noises after I've been sleeping for an hour. I'll probably have to see the doctor if it keeps up.

Anyway, here's some weekend reading:

New Deal Democrat - long leading indicators to the rescue. So apparently there's not a recession around the corner anymore?

Calculated Risk - retail sales decreased 0.4% in January. However, to avoid being misled, you should instead look at yoy, where it's up 2.6% - or 3.3% ex gasoline.

Bespoke - gold is above its 200DMA. Uh-oh! The blogosphere has picked up on gold! And this is a good website too, not Business Insider! It might be the overwhelming disgust of gold and the miners has finally dissipated and we're going to see cash flow back in to float us back to mediocrity now.

Yahoo Finacne - hedge funds going long gold. And suddenly balance has returned to the Force! It's funny by the way to read that Soros bought 6.3 million shares of Barrick, cuz... - 36 million ounces of gold vanished from Barrick's reserves. That happened when Barrick had to use $1100 gold instead of $1500 to calculate their reserves. This will hopefully explain to the pencil-pusher at Goldman Sachs that future gold supply really does disappear (from an accountancy standpoint, anyway) when the price goes down to $1100.

The Economic Geologist - the farce that is the junior exploreco website. Into a little more detail on Brent Cook's pet peeve of the month:
I review a lot of early and advanced stage projects and I can count on my one hand websites that I have come across that are actually attempting to present their results in a truthful and conservative (wise) way.

Eventually I realized the company mentioned did not even post their NI 43-101 report on their site. No, you had to go over to the SEDAR website and do a little advanced search. That’s the mandatory Canadian document filing system for listed companies. The geology and resource section was beautifully decorated, naturally, with the main emphasis on “equivalent grade”. The reporting/ publishing of “equivalent grade” is of course banned by the Canadian Securities Law unless it is accompanied by the actual metal grade. If you were to have had a magnifying glass at hand, you would have been able to see the actual metal grade printed in microscopic font and 1 RGB code away from pure white. Simply put, pathetic.

This sort of chronic dishonesty (a half truth is a lie and a truth told with the intent to deceive is also a lie) in the exploration industry is what perpetuates a negative stigma around the mining industry as a whole, but in the end, it is the junior company itself that loses the most. People, and/or companies who are looking to spend serious money tend to do rigorous due diligence. And a half baked, half honest marketing attempt leaves a bad and sceptical taste in the mouth.
Generally true, and I completely agree with the underlined two statements in the third paragraph, and I'd add that these companies should not be even traded on grown-up exchanges. Let them all go to the NEX or the pinks to scare up sucker capital. Because if they aren't giving you the information you need to know, they're asking you to play the sucker.

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