So, having now read Mr. Cooks analysis of both GEL and CTG, both filled with kind and encouraging thoughts of the projects and their management, I feel as if I know this person's character.
I can imagine his least favourite task is telling companies that he is sorry to remove them from his list, a duty I suspect he does not relish.
Probably a nice guy to have a beer with.
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Mr. Cook and his readers are getting a divorce from GEL at the same that I am renewing my vows, and now I am even having an affair on the side with his recently-dumped CTG, an affair that could turn into something serious as I spent time on the long weekend looking into this company. Bigamy…possibly…if I am not careful.
Nevertheless, both I and my money are voting for the partners that Mr. Cook is leaving at the altar, and I am not an unintelligent, unsuccessful or unsophisticated investor.
Now his readers are dumping both GEL and CTG with the same mindless mind-set in which they buy, and I have more shares of GEL than I have ever had and will continue to increase my CTG position.
The Rant
Mr. Cook wrote about CTG on March 27th, 2011 and put out 'buying' comments at 67 cents.
But just a very few trading days later, on April 7th, 2011, CTG was trading at $1.29, so it appears that precisely the same thing that happened with GEL happened with CTG: His voracious lemming-like readers ran the stock up, and it is reasonable to assume that relatively few even paid the quoted buy-price of 76 cents because it simply didn’t trade at that price for enough of his readers to accumulate real positions…so they went chasing it.
Some may have got shares in the 80s, but in looking at the volumes created by his ‘selling’ comments on both CTG and GEL (as noted below) there seems to be much more trading on Mr. Cook’s comments than would have satisfied his readers’ demand on the buy-side at, or even near, the quoted ‘buying’ price.
CTG opened at 87 cents the day after the comments and traded a low of 82 cents with a high of 95 cents. The next day it closed at 81 cents and the next at 95.
I feel it is reasonable to assume that the meteoric rise in both CTG and GEL that occurred immediately after Mr. Cook's comments was the result of those comments.
If this is correct, then I feel it reasonable to assume that the "almost 80% discount” that I used in my post last week as my “discounted cost” for CTG compared to Mr. Cook’s readers may actually be greater than I had thought since I do not think it is unfair to assume that many of his readers paid $.85, $.90, $1.00, $1.10 or even more for each share.
CTG has done a financing in the interim, at a price that looks very attractive right now, and I can see no developments on the negative side to warrant such a massive and substantial decline to 20 cents.
I could grasp a comment like “Buying CTG at 20 cents” from Mr. Cook far more easily than I can grasp the ‘buying’ comments at 76 cents, let alone the prices that many of his readers no doubt paid. Yes…there are been developments, although nothing drastic or game-changing on the negative side, and continuing good news on the positive side, but it was a buy at $1.00 and a sell at 20 cents!!
Je ne comprends pas.
I take serious note of Mr. Cook’s comments, but I feel much safer buying here than I would have felt buying CTG at 80 or 90 cents, let alone the high of $1.29 that it reached just days after he wrote about it.
If he says that it was a "sell" at 35 or 45 cents but not 20 cents, he certainly had to know his ‘selling’ comments would push the stock to 20 or below, even with appropriate caution.
I would have more faith in my brother-in-law successfully driving home drunk then I would have faith that Mr. Cook’s readers might act with prudence, even when advised to. Possibly Mr. Cook has seen how they behave sufficiently to at least understand why I feel this way.
It may also not be Mr. Cook's fault that his readers rocketed CTG, especially since he (may have) cautioned them, but the 'buying' price listed in his portfolio for both GEL and CTG are almost certainly not what many of his readers paid on average...possibly they are not even close for many and possibly not even precisely reflected in a single reader’s average cost.
Nevertheless, how many times do I have to give a few dollars to a drunk on the street only to see him walk into the liquor store before my saying, “I told him not to buy booze” no longer has any meaning and is no longer an excuse?
However, this still does not mean it is Mr. Cook's fault that his readers act like fools, and nor does it mean that it is my fault that the drunk buys more beer, but I at least have to admit that I am acting in a way which will produce a result that I fully understand beforehand.
The ‘buying’ price cannot also be Mr. Cook’s buying average as it seems to simply be the Friday close the day before his newsletter.
Both GEL and CTG graphs, even looking over a two-year timeframe, have a sharp and impossible-to-miss inverted “V” shape, although GEL’s massive run began just a few trading days prior to the newsletter.
GEL first traded between 43 and 49 cents at the open the day after his comments and did not trade once at the 'buying' price of 37 cents in Mr. Cook's newsletter.
GEL’s traded as low as 40 cents the next day, but that was the only day it traded there that week. The next week the low was 44 cents and the high was 53 cents; the next week it traded a low of 50 cents and a high of 60 cents…until it reached its all-time high…in a much similar fashion that CTG did.
If these people go to China, I will try to arrange a lunch with my aforementioned brother-in-law, a nice but somewhat dull man who throws his money around without sufficient thought...and a lawyer, no less, to double shame me.
I am at a disadvantage here to comment on the meaning of this volume or whether Mr. Cook put out a ‘selling’ comment at that time as both GEL and CTG peaked, but as it seems reasonable to assume that his readers were doing a lot of the buying, I am not sure what would have happened if he had.
Nevertheless, it is entirely possible that he did put out a ‘selling’ comment, and wise of him too, but although I have a copy of the portfolio, I have neither a copy of the weekly newsletters on those dates nor the time to comb them if I did.
So, although I appreciate Mr. Cook’s putting the 37-cent ‘buying’ figure in his newsletter, my preference would have been to have quoted the price that would reflect a reasonable estimate of what a substantial number of his readers might have paid.
But Mr. Cook obviously does not agree with me, as is his prerogative.
As GEL did not trade at that 37-cent ‘buying’ price until roughly October 3th, then only readers who waited a full three months would have had an average price of 37 cents…and even then, it only stayed there for a moment in a dramatically sharp and narrow “V” on a graph, trading up at 52 cents just a miserly three days later on October 6th, all on low-to-medium volume.
It did not have a sustained trading range at that 37-cents level at a time where large numbers of his readers could have bought a position until half a year later at year-end selling when it began to trade volume in the 30-40 cent range around December 1st, 2011.
I do not believe it is unreasonable to assume that almost none (or none at all) of his readers would have waited half a year to match the ‘buying’ price of 37 cents or something close enough to count.
I am writing this because I disagree with Mr. Cook’s way of quoting the previous day’s close as his ‘buying’ price as it is neither a reasonable average price where his readers might have accumulated their positions, nor his own cost.
Nevertheless, in working out the percentage profits or losses in his portfolio, he appears to use the previous day’s close, a theoretical number relating to no one on Earth.
Mr. Cook can always say that his ‘buying’ price is not meant to be his readers’ cost, but in looking at the portfolio, a ‘reasonable man’ would think that the prices and percentage of the losses or profits are reflecting real people, not non-existent people that include the very real Mr. Cook himself.
To try to understand why these Friday closes do not reflect any real people, I looked at the recent sell-volumes on CTG to get a sense of his reader’s appetites.
From the day of Mr. Cooks ‘selling’ comments a few days ago until the close of trading on February 15th, CTG traded 3,802,400 shares in 5 trading days. To equal that volume prior to his comments, one has to go back an astounding 40 trading days until December 12th.
So, CTG’s share price has been cut by 60% from a recent high of 45 cents on January 15th not coincidental to Mr. Cook’s comments. Some lucky people bailed out at the right time, but I was not one as I was a shareless shareholder at that time, but I am correcting that situation as best as I can manage.
However, I now have a better understanding of the mindless selling of GEL and CTG and their current low prices, mirrored nicely by the same irrational behaviour on the buy-side.
I assume that Mr. Cook’s readers have seen the spike on ‘buying’ comments and are all rushing unthinkingly (and this is their strong suit) for the door as they believe CTG could be at 10 cents and GEL at 5 cents by tomorrow, a reasonable worry until all this incomprehensible and stupid selling finally dies out.
Between now and then, I will continue my accumulation of GEL and continue building my CTG position.
But as Mr. Cook himself says, his readers are not even doing what he suggests.
Nevertheless, even moderate and moderated buying of CTG or GEL would not have whetted the appetite of his readers: There are not simply enough shares available in the markets of either CTG or GEL to accommodate the size of the buying generated by Mr. Cook’s comments.
This is not the stock market equivalent of feeding 5,000 people with two fish and five loaves of bread.
No one from heaven is giving anyone a hand here, save the shareholders who were positioned prior to these fantastical runs and dives, so very lucky though they are.
Mr. Cook and I disagree on how his ‘buying’ -and possibly the ‘selling’- figures are chosen.
But he has a right to choose these figures anyways that pleases him, and I have a right to comment on his choice.
Sam