FDR and the making of a perfect stock chartBack in the 1990s, Jack Welch and General Electric were admired for their steady, predictable quarterly earnings. Eerily predictable, in fact. Leading to investors’ love affair with the company’s stock.
Turned out there was actually a lot of room at a massive, complex conglomerate for accounting decisions and classifications that, on balance, impacted EPS exactly like shareholders would want them to. But perhaps did not reflect reality as much as proper accounting should.
Fortunately, we do not have such a dilemma at FDR. We are a very simple company, and it is easy to see right through to our cellular structure, so to speak.
Is there a similarity between healthy human development and healthy stock charts? In other words, just as, absent environmental impacts or voluntarily ingested “food” poisons, we would all end up being our best selves, so too would all companies prosper but for management dishonesty and governmental overreach?
I have never tried a radically healthy diet, but supposedly those rare humans able to maintain one do turn into virtually a different species. Kind of like what Founders’ management team has achieved so far in creating such a rare investment opportunity for its shareholders.
The essence of any market success might be just that simple. FDR succeeds by clearing away obstacles, rather than manufacturing an appearance. Sure, they run the drill program in such a way as to deliver a steady flow of news. But they also manage the financing process to minimize overhang of shares and warrants, make an orderly market for large shareholders wishing to lighten positions, and generally give FDR longs comfort to hold a stock whose chart will inspire confidence over any time-scale.
The Butcher made a nice summary comment yesterday, at the end of a Founders’ consolidation trading session. But I must respectfully disagree with his worst-case scenario. Our stock hardly needs to build up energy to move higher at this point. It should happen quite naturally.
What, exactly, will stop it? Our geos somehow lose their understanding of how to chase those gold veins? Or the geological structure changes radically a few kilometers away from the Upper Antino complex? Realistically, just how likely are those kinds of problems?
A move to the $5 range by winter? More like a move to the $6 range before autumn. But I am impatient. There are other investments out there waiting for my FDR profits after the buyout. A few are hidden gems like this stock, but also a few which hide in plain sight. I am sure many of you have carefully selected destinations for your profits also.
Am I bringing bad luck on Founders by airing such thoughts? Superstition haunts me too, even on my best days. But optimism is its own dynamo of creation. Let that engine run.