Post by
PGMBOY on Jan 31, 2005 9:30am
THE GOLD ADVISORS HOW SMART ARE THEY?
The greatest problem the Gold Community faces is the lack of leadership on the bull side by rational, experienced commentators. Even the old timers have devolved into the "trade it all the time" madness.
This madness is the failure to recognize the small cap nature of the entire gold sector. Because of this, the "trade it all the time" gang of gold writers - all competing to prove how smart they are - have severely hurt the gold sector. These gold advisors, out of ignorance perhaps, became allies of the short sellers of gold shares, resulting in some gold guys picking the pockets of a few other gold guys until the game of musical chairs has no more willing players.
The problem the shorts - both legal and illegal - are trying to cause is to dry up financing for this sector to benefit their short positions. Juniors can easily protect themselves by not spending more than their income, seeking private rather than public financing, canceling all internal programs that expand their outstanding share capital, and doing their job of exploration well. It is what happens on the ground - not hot air - that makes a good exploration situation.
The legal shorts deserve our respect because they are taking a risk that is theoretically without limit. The illegal shorts on the other hand are simply criminals without the courage to get a gun and steal like a man. It is a disgrace that both the administrative officials, exchanges and electronic transfer systems support this cowardly act of theft.
The companies that will not only survive but prosper are those with private and determined means of financing, control over costs, and highly prospective properties.
Your position that there are no great mineral deposits to be discovered anymore could have been said only a few years ago before the Bulyanhulu orebody in Tanzania was proven. This property went from 1,000,000 ounces to 12,000,000 ounces. I believe it will go to over 19,000,000 ounces on the primary reefs alone. It is my belief that those two reefs have a common sister at depth. I used to be the Chairman of the company that owned Bulyanhulu and was later sold to Barrick Gold. Your statement is simply untrue.
The factor that will correct the situation that you lament regarding the size of the short position in gold shares is the price of gold. I firmly believe that the price of gold will in this long term bull market exceed $1250. It is my belief that this price will occur in the not too distant future. As a result of this rise in the gold price and given the outrageously large short position in the minuscule sector of gold shares, the price of all viable gold entities will go totally out of sight over time.
Therefore, bless the shorts for they do not know what they are doing. They have no idea the depth of the trap they have set for themselves, having been seduced by the success they have enjoyed up to now.
Regards,
Jim