Tuesday, March 4, 2014

Brent Cook's on BNN today, and a rant after the break


Cookie Monster sent me an email (because we're buddies dontcha know) to remind me that he's going to be appearing live on BNN today, Tuesday 4 March, from 1-2PM.

Even worse, he says "you may call in (Toll Free: 1-855-326-6266), Twitter (@marketcall), or email (marketcall.bnn.ca) with questions during the show." Obviously he didn't know what he's getting himself into! So here's the deal:

I'll give a shiny 1oz silver coin* to the first reader who is able to call in or email, and get the phrase "Cookie Monster" mentioned live on BNN.**

* - Buffalo head, 1 troy oz. But I'll only give it to you in person. No mail, no paypal, no fiat - only hard money, unprintable, from my hand to yours, the way baby Jesus intended. Payment at the next PDAC or TRIC.

** - the easy way to do this would be to ask his opinion on Vantex's "Cookie Monster" property. But no I will not accept that. You will have to work harder.



And just to head off the fanboys before they post in the comments section, yes I know Rick Rule was on BNN yesterday afternoon. However, I've been thinking recently about the idea of "speaking within your competence" (due to my own impending professionalization), so I'm not interested in providing links.

See, some people in the junior mining analyst world are competent within specific fields. Cookie and (as far as I remember) Rod Stewart at Clarus are exploration geologists; Adrian Day and Ian Graham seem to be economics grads, and most people at the investment houses (and even our buddy in Peru) seem to be pencil-pushing accountants.

So Cookie is qualified and competent within geology, and therefore when he talks about geology I'm happy to listen. If Adrian Day says something within the context of macroeconomics, I'm also happy to listen (though I'm unsure how much he realizes that economics is a chaotic feedback system with multiple equilibria, and therefore simple math doesn't necessarily give you the right answer).

And if some pencil-pusher at RBC does a FCF analysis of a junior miner, I'm also willing to listen - although I know he also needs some clue about how to build a mine.

But importantly, I'm going to try in future to only listen to people who have a field of competence. Further, I only really want to listen to people who only speak within their field of competence.

This is the reason why I'd rather see Daniela interview Clive Johnson (competent at building multi-billion-dollar gold miners), Eric Fier (PDAC-recognized expert at building a mine on time and under budget), or Pierre Lassonde (dunno what he's good at, but he did invent the Lassonde Curve) - instead of clowns with newsletters who have never had a professional job in their entire lives.

Cookie actually does a really good job of only ever talking about exploration and economic geology. You can tell he understands professional ethics: a professional actually is not even allowed to speak outside their field of competence. So I'm happy to plug his appearance on BNN: he's a professional and he acts like one.

I have no clue what Rick Rule's field of competence is, but I'm sure it has nothing to do with macroeconomics or professional geology; maybe he's taken accounting classes, I dunno.

And the problem is, Rick Rule keeps opening his mouth about shit he has no idea about. So, really, there's no point in me (or you) listening to him: we can get the same level of insight on the Stockhouse boards.

So no links to Rick Rule on this blog.



PS: And yeah, my own field of competence is not geology, accountancy or economics. But you're not coming here for competence, you're coming here for abuse! You want room 12A, just along the corridor.

24 comments:

  1. Ok, point made nicely. From what I understand form the above, "field of competence" must have a piece of paper with an official qualification, that right?

    Let's take Rick Rule as the ongoing example (never met the dude btw, and i'm agnostic on him and his views). Evidence strongly suggests that his very competent at making a shitload of money from invetsing in mining companies. So maybe his views on making money in the mining sector are indeed valid, despite not having a crisp piece of parchment on his wall to back them up.

    Thoughts?

    ReplyDelete
    Replies
    1. Fine. If he's talking in general terms about investing, listen to him. I'd keep in mind though that you're not Rick Rule, you don't have access to his pool of capital, you don't have access to the information he has access to, you don't have access to his investment opportunities, and you don't know at any time whether your particular goals are in alignment with his.

      Also, the "experience" card requires constant application of the "what have you done for me lately" test: has anything he's ever said made you money? And even more, has he himself truly been making money these past few years? And has he truly been making money by investing, or has he made his money the old-fashioned way by charging fees for money management?

      In any case, the minute he opens his mouth about politics or economics, tune him out because he's ventured way outside his field of competence.

      A piece of paper might not truly be necessary, but being a member of a professional association really does since you're constrained by your code of ethics (if it's a true professional organization) to only give opinions within your field of competence. Cookie demonstrably understands this.

      Delete
    2. The piece of paper thing depends on the field of competence in question, mereckons. Re geology it's absolutely necessary because 1) it's a technically difficult discipline with a lot of basic bookwork to get through (the more i've hung with them, the more i realize the body of knowledge you need to come to solid conclusions...and it's a shit-ton) and 2) it's really fucking easy for the dilettantes to pretend knowledge of rocks (which is one of the things that drives me mad about that charlatan Louis James by the way...but that's another story and a different shoulder-chip). Learn a rock name, geological term for a setting or system formation, nod wisely at the round table...bingo, insta-expert.

      Re moneymaking, it's about results more than background. I'd "defend" Rule (y'know..theoretically...doens't need it...i don't really feel like etc etc) by saying he's not a BSer in the way he collects sector experts around him and uses their smarts to make his money calls. I'd agree that at some point he must have been dealt a big slice of luck on an early trade to start his reputational ball rolling, as from that point come the mkt advantages (financial, inner circle whisperations, etc) but he's the type who has 1) the right level of tenacity and 2) the all-important desire to get rich then richer then richer still, hard-nosed capitalism if you like, which makes for the type that someone wanting to find good trades in the mkt should follow.

      And in the end, i don't give a flying flip about the politics of geols either (which is a good thing, they tend to be hard right GOP or Libertarian), so the financial guys' politics washes over me as well.

      Delete
    3. OK, your response inspires two comments from me:

      1. A geologist's political views will probably not screw up his interpretation of a mineral deposit. Rick Rule's political ignorance and incompetence at economics, however, could eventually be his downfall.

      2. If you had Rule's access to capital and experts over this past ten year bull market in gold, plus a steady personal income from managing OPM, would you have also been able to earn yourself a fortune? Probably. Nine tenths of success is being in the right place with the right tools.

      Delete
    4. 1) Pure rock geology, agreed. But "economic geology" (which is the subject in question here, juniors et al) disagreed. I've seen geols walk away from the what the rocks tell them in X LatAm country because of the "crazy people running the place" more times than is necessary, and conversely (and prob more importantly) they've committed to places that they shouldn't have wasted their time on because of their inability to read the political risk. Then what happens is they "like the rocks" and will defend the deposit they've found/developed, which is fine if you're the grunt geol, but more often than not it's a geol who's CEO of the exploreco and painting him/herself into a corner.

      2) Fully agreed. Doesn't make his calls wrong though.

      Delete
    5. 1. OK, there is that. Forgot who I was talking to for a sec.

      2. A guy can be right for a long time, for the wrong reasons. We'll see how Rick Rule does in the next few years, when it might be very hard to find a miner whose stock goes up.

      Delete
    6. Couple of points:

      Politics won't color the actual deposit. But will make me walk away.

      Deposits are like babies to some geos. Its easy to get sucked in and not realize your beautiful ray of sunshine actually looks like a cross between Cartman and Chucky.

      Its our solemn duty as geologists to regularly listen to The Gambler to remind ourselves that sometimes you just gotta walk the fuck away, no matter how much you've put in.

      Delete
  2. To answer your question, Rick Rule's field of competence is Being a Collosal Dick. Any time you need a real major asshole, for any reason, call Rick Rule. He'll come on your show for free and dick things up. He'll tell you how great is to be him, to be rich, to be a fascist plutocrat but call it something else so folks don't catch on, all that good stuff that he does so well. He might even bring his pal Eric Sprott - two schmucks for the price of one!

    ReplyDelete
    Replies
    1. Most people who make serious money in the stock markets are dicks on some level imo. Heck most CEOs are dicks. It kinda comes with the territory. But since they make tons of money, their dickishness is generally condoned.

      Delete
    2. >Also, the "experience" card requires constant application of the "what have you done for me lately" test: has anything he's ever said made you money? And even more, has he himself truly been making money these past few years?

      If you used this criteria for everyone, there's be no one worth listening to on the entire planet. over a period, let's say 10 years, every single person has bad runs. Especially when someone focuses on a single sector, like natural resources, because nothing goes up all the time (or in tune with the general market). It's kind of an 'all or nothing' philosophy, and those never hold water over a longer period. For me, everyone has their strong and weak points, and the trick is figuring out which pieces to pay attention to, and which to discard.

      Delete
    3. Yes, you can't stick in natural resources through secular commodity bear markets. But the guy who knows what he's doing knows when to get out. (Jim Rogers always gets out at the top, then goes motorcycling through China for 15 years.)

      I'm really arguing that Rick Rule made money when it was easy to make money, and he had help doing so in the form of a pool of capital, an income, and access to information. So it's wrong to over-hype him as some excelling genius when in reality he's just been at the right place at the right time with the right tools. Yes he didn't screw it all up, but did his success really make him an authority at anything?

      If we're about to enter a PM secular bear, I am wondering how long it'll take him before he realizes it.

      Delete
    4. I've met money guys who aren't dicks, if that matters. And also, Rick Rule promotes his dickishness publicly, which makes him fair game for potshots.

      Delete
    5. He had access to cheap paper and the chutzpah to sucker little retail fish into deals he could then unload and proceed to free-roll... Hurray for him--when's his next speech about anarcho capitalism (read: I'm a lucky fucking bastard so let's call my luck an "economic philosophy") and the collapse of the dollar and gold and doooom with 5 o's?

      Delete
  3. Time for PSDave to chime in:

    First off, IWNATTOS Brent wishes you would stop calling him "The Cookie Monster" I got that out of him when I chatted to him at the VRIC in January. I was going to tell you earlier but waited for the right time. So cut it out! You have been told!

    A little Rick Rule history from when I was part of VSE pump and dumps in the early 90's.

    Back then Rick was a young eager buck that aligned himself with Michael Baybak, George Duggan and the Oxford Club. Two notorious VSE paid for newsletter writers, we hired these two for some promotion, Michael hit the east coast Florida area and George was the west coast contact.(BTW these two dudes are still being hired by schmucks here in Vancouver)

    You would pay them $100,000 plus 300,000 options and they would write up an old fashion newsletter that they would send out to their data base by snail mail. 1 million pieces would get sent out. You could always tell where they were hitting by the calls coming in from different states at different times. If you wanted your stock to go from $0.25 a share to $1.00 these were the guys! (back then most pubco's only had 10 million shares O/S) Rick would get in on the better deals, and if you had Rick in on your promo, well that was promotion within itself. Rick Rule was on board you knew it was going skyhigh, you had to pay extra for him.

    Rick was affiliated and still is affiliated with the Oxford Club along with Baybak, I know as I joined for a couple of years to get the secret book of investor contacts, It was the holy grail in terms of IR.

    George Chelakis was another notorious news letter pumper out of Florida that eventually blew up that I am sure talked to Baybak, Rule and Duggan back in the day, they all attended the same conventions on the east coast. There was also Stanely Lanzett out of New York that you could hire, but he did not pack as much punch.

    Fast forward to today and Chelakis got shut down by the SEC, Baybak and Co are getting old and probably shuttling around in golf carts with oxygen tubes in their nose in their respective respective warm climates.

    Rick Rule was the only one who capitalized with the contacts he made through the Oxford Club and Baybak to where he is today. Sure he got in on the cheap paper on lots of deals, I am sure Freidland used him and his services back in the Voisey Bay days, on and off the record.

    Rick also got lucky with the run up to $1900 gold, So in Rick's case it is not what you know it is who you know and he has done a very good job and getting to know everyone in the mining business.

    Rick success also stems from his devilishly handsome looks and his ability to get in front of an audience and spout his opinions, it is not like Baybak or Duggan have ever been scene at a convention or on TV.

    At the end of the day Rick is a true gun for hire promoter and at this point in his cycle he is only going to put himself behind the deals that he thinks has a chance or has the deepest pockets to hire him.

    Only in the mining industry can this take place, the greed and fear cycle can go on for many years until a mine is either in place or a dud. There is no way you can pull this off in the Junior Oil and Gas sector.

    ReplyDelete
    Replies
    1. Devilishly handsome? Are you a fanboi?

      I guess a takeaway from this is that Rule would have learned early on how to tell people what they want to hear. If that's the case, then he's precisely the person you don't want to listen to.

      It would certainly explain his politics and his libertopianism.

      Delete
    2. And now that I know it annoys the Cookie Monster, I'm going to continue calling the Cookie Monster the Cookie Monster.

      Delete
    3. I knew that would happen, should have let that sleeping dog lie!

      Delete
    4. See, you start out making a blog post stating that you won't link to Rick Rule, the subject of Rick Rule isn't for you blog, and then the comments blow up into a total Rick Rule-fest. PDARRC - prospectors and developers Rick Rule conference, now taking place, right here! Fucking Rick Rule...

      Delete
    5. http://voices.suntimes.com/wp-content/uploads/2013/08/Cookiemonster2_FB.jpg

      Delete
    6. Might I suggest The Legendary Cookie Monster?

      Baybak the Scientologist still footles around in the background (does things with Axemen, Cardero Group, other p&d) but has faded in mkt clout not much doubt there. But great background there, permashave. Thanks.

      Delete
    7. I does believe that Caledonia Mining was one recipient of the Oxford Club pumping. I was doing fieldwork for them at the time and they went from $1 to over $14 and got named to the TSE 300! It all ended in tears.

      Delete
    8. Goggle "Rick Rule Oxford Club" and it comes up with his post PDAC speaking engagement at the Oxford Club on March 26th, go figure.

      Delete

Don't bother commenting unless you have some useful information or valuable commentary to provide.

If you're a fucking tool, please go to Yahoo News for all your commenting needs.