Fabled Silver Gold Corp T.FCO

RE: RE: Book Value 2 bucks???

[JohnEStromJr]

Perhaps we're being distracted and focusing on just individual companies we think will be successful.  Of late I'm coming up with a different thought.  I may be wrong but it seems to me - and I've mentioned it before - that there are really two groups of miners.  The juniors which would include the exploration companies and the giants.   I think that's wrong.  I think there are three groups.

1 - explorers.  Here is the risky end of the business.  Small, underfunded companies out trying to find that "mother lode" that the giants didn't find.  It happens occasionally but not often.  They are always in a precarious position trying to attract capital from individuals and financiers but usually they end up being controlled by the financiers who have them by the throat.  We are retail shareholders and pay retail prices but the financiers will have a ton of advantages including a far, far cheaper price and many other concessions.  They will also have access to information we never see and will be the first to bail if things go wrong.  The explorers are living on the edge - high risk and [potentially] high reward.  They only advertise the good news and bury the bad.  Shades of Bre-X and welcome to the Canadian venture exchange.

2 - junior miners.  They have been lucky and found something.  There is a wide range of startup to producing mine but all are small and cash strapped.  Most don't make it for a variety of reasons including under capitalized, the mine is not economic, minimal infrastructure or too expensive and the markets.  Junior miners have virtually no control and are heavily mortgaged to the mega bankers and financiers who they need to survive.  They also need an every growing, enthused group of retail investors to be their sale force in selling the dream.  Most of us crash and burn.  If they have a great find then they are in danger of being swallowed by one of the giants.  We merely  front end the building of the mine and proving the resource.  Once those are done we're not needed any more.  If the resource doesn't prove itself we die a natural death, the company goes broke and most everyone loses.  Usually the only survivors are the officers and board who will figure a way to save themselves.  We are not needed nor protected.   If the resource IS there then the betrayals begin.  Ultimately one of the giants will want the mine and the board will opt to sell out their investors and do a friendly deal.  In the end we are "saved" by a white knight who offers us a "bonus" over the average share price of the last several weeks - after they've successfully driven the price into the ground.    Take a look at the one year chart on FCO - this is what a betray will look like.  Not saying FCO is doing that but that is what the chart will resemble.

3 - The Giants.   They own most all of the mineral wealth on the planet.   Some are better than others with regard to integrity but in the end it's "show me the money".   We all know most of the names - suffice to say all have a close relationship with the mega banks.  Not that they need the money as much as they like to give a "taste" to their buddies.  They ALWAYS win.  Not some of the time.  Not even most of the time.  ALL of the time.  They, or their banking buddies or their financier buddies will find assets worth "acquiring" at a very good price and the engineering will begin.  There are dozens of methods and hundreds of variations but they use all they need to reach their ultimate goal - steal the asset, screw the shareholders and make a TON of money.  One of the easiest is to contact the board of directors or officers of the target to see if they will play ball.  If they will, so much the better and it makes their job easier.  If not then attack their ability to get financing, create labor unrest, naked shorting, sabotage and a lot of other tactics and strategies I've not mentioned and more than likely many I've not thought of.   This is about money and power.  We retail investors are the sheep or the cattle or the suckers believing in the dream.  We continue to be used, fooled and robbed.   Enough of us make some money but rarely the big money.  It's like going to Las Vegas - some win occasionally but even they usually give that money back to the "house".  It's a rigged game, folks and we are not supposed to win.    Forget about any help from the exchanges either - they control that as well.   In short, we take the risks - they rarely do.  When they do they have "insider" information and leverage and power.  We have none of the above.  The only way we can win is - being incredibly lucky or invest only in the giants.