RE:RE:I've finally discovered why Bruce has made EUO into a JOKEChutzpah, you wanted to know what I did? Well I wrote this post to respond to kidl2 yesterday. I then decided not to send it, as telling people what you have done and are planning to do probably isn't the best strategy, ... but since I'm suddenly very ambivilent about EUO, what the heck...
Oh Stan. Stan the man. That brings back some bad memories.
Sadly I probably fell into your 'technical group' as I fell for the 'hope' that GFI provided, that and the expectation that the company would be worth more than the incoming cash in 2016. It briefly was, but it never once got close to my expectations, or the pumpers pipe dream levels.
As for the CEO, well I never thought he was very good, or even passable at his 'storytelling'. I cringed as a shareholder everytime I saw him interviewed on BNN. I'd hear him get in all of the buzzwords as he talked about the tech, but he would never sell me on the profit making potential of the company. Maybe he was just more scientist than salesman. I was grateful for the exposure. Grateful for the buying right before some of the appearances ;) but usually wound up cringing after he finished talking. kidl2, I guess you see him as more of a capable salesman/storyteller than I do. Considering his longevity as the CEO, I suppose the BoD and large shareholders do as well.
That said, you are 100% correct that it is a trade. It is ONLY a trade, in my humble opinion, and has been since I've been in the stock. It has been probably my best trade the past two years. My simplest trade. Just place your bid the slightest bit above the net cash level, wait for it to get filled, place your ask 10% or so higher, get the fill, then bid at the next level below where you previous bought. Just half a cent lower each time you bid, and you were basically golden. Management kept constantly frittering away, or should I say 'spending on R&D and cost of sales', a little more of the cash each quarter and the share price kept tracking the decline in the net cash balance for the most part. Sure there were some attempts to manipulate the share price higher. These tended to stall at about 3-4 cents above the net cash level. There were also some attempts to drive it below net cash. I loved those. They barely lasted a week each time. Outside of those, this has been one of the easiest trades I've encountered.
It has been one of my two best money makers in the time I've been in it. My number one YTD.
And despite this, I've decided I have to change my strategy or just leave it behind. I'm now expecting the black cloud of this non-stop cash burn to drive away the occasional larger than normal EUO investor / day trader with semi-regular frequency. I'm expecting to see numerous occasions where someone else throws up their hands and cashes out going forward. Maybe they will just be locking in a tax loss and re-entering 30+ days later. Who knows. I think of these potential dumps as very short term opportunities because I think each time it happens, we'll dip below my theoretical net cash level. I'll have bids in place to capture these opportunities, but I'll quickly be a seller at 'net cash' or just slightly above each time it happens.
If you don't see EUO they way I see EUO, even after what has happened with it in the last 18 months, hey, thats fine. Markets are made because people have different viewpoints. I couldn't have done it without many of you, so thanks. Thanks to you especially Bruce. I know there were many, many times where you were the only one willing to buy shares from me and help me lock in more small profits. These were usually confirmed on CanadianInsider the next day, so seriously, thanks. I hope my poor storyteller opinion didn't sting too much.
As for the rest of you, with your rose colored glasses on, with hope and dreams in your heart for EUO, I wish you the best of luck. Did they say they have 50 employees somewhere? You would expect that that number of people could come up with something that would start making the company a bit of net profit at some point in time. I had high hopes for XwinSys. A single sale in December or January could have really turned things around for the company. However if they couldn't sell any then, and with the pace of technological advancement... well you can fill in the rest. Xenemetrix? Each unit seems to have good margins, but you also have to look at the cost of sales. There is a reason my net cash guesstimates keep falling. Now if they could contain the expenses better, and perhaps sell a much larger number of the units, well the potential can easily be seen. Unfortunately waiting for this kind of execution has taken so long that I'm on the verge of walking away, then waiting for profit proof before buying back in. Croptimal? Does anyone have a clue when this might start making the company some money? I certainly don't. Does Bruce? Do you not even want to drop hints about potential profits or time frames for said profits Bruce? I would think that if there was anything there on the short term horizon, he would be talking it up in some detail these days. I love the idea. More efficient farming made possible by Eurocontrol's machines. Start executing on that and show me some profits and I'll be one of your biggest supporters.
Until then, I'm just changing my strategy and waiting for disgruntled longs to bring the shareprice to me.
Good luck y'all. If you can't take the rose colored glasses off, at least give them a good cleaning.
Please post rebuttals and flame on.
kidl2 wrote: That depends on your perspective. He did very well for some people; himself included.
He also deserves credit for staying in power for 11 years in spite of losing money in all but a few quarters (or was it just one?) and in spite of not getting one single solitary idea / venture beyond the R&D stage / to profitability.
11 years of doing nothing but babysitting and storytelling kept the man and his cronies in distant and not so distant lands in “gold plated” groceries. That’s quite remarkable!
I often wonder how many sets of shareholders it took to keep this charade alive over all these years and then you have the different types (traders excluded) ...
The largest percentage, I suspect, are the typical storyteller followers (and a good story he tells). They don’t need any sort of verification. They simply get enamoured with the story and even more so with the one telling it who has mastered the trait. They recognize but not accept their ignorance and are determined to fight it to the bitter (sweet?) end. For good examples, go no further than this forum.
And then there is the, let’s call it the “technical group”. A term not to be confused with TA. It’s a group of fair to well educated individuals who strive on finding anything even remotely close to technology or “deal” breakthroughs. This group just needs a “taster” and they will go off on a wild goose chase. They will spin their own dream theories while completely ignoring reality. Probably Bruce’s favourite group. He just has to start a story and they will complete it for him and actually convince themselves that it’s “investable” while completely forgetting that the people behind these stories have no credentials nor track record to speak of. They just know how to promote themselves and their “pet of the day” idea / concept / whatever.
EUO is a trade and has been a trade ever since I encountered it more than a decade ago. Either you play the swings or you lose your shirt / sit on dead money for long periods of time.
PS: Having gone through the Bharti era, I truly believed that after the SICPA deal, the era of “bad habits” had run its course. It hasn’t. Bruce has blamed Bharti for sucking EUo dry leaving no money for anything else. For the last five years and more so, the last 2 years, there was lots of money and what did it accomplish aside from keeping the cronies in groceries?