StanInvest

Issue 6
Issue 5
Issue 4
Issue 3
Issue 2

Issue 1 (this one)

StanInvest Fri, 28 Feb 2003 11PM

Stan to Stan

This is an interesting example of what constitutes real news:
http://www.fuckedcompany.com/

AOHell
Rumor has it AOL is shutting down their Dulles, VA headquarters and is moving everyone to their shiny new building in NYC... In other AOL news, Ted Turner dumped yet another $50 million in stock. There's a big sign of confidence in the company... what's next, moving the call center to India? "You've got curry!"
When: 2/28/2003
Company: AOL Time Warner
Severity: 25
Points: 109
192 comments in the Happy Fun Slander Corner!

The more I look the more I come to conclusion that reading regular business sections and news from the mainstream agencies is just bloody useless. I am convinced there is a lot more gold in rumors even if some might prove wrong that in the mainstream media biz "news" garbage which is almost GUARANTEED to be late and/or of no practical value.

Stan

StanInvest Thu, 27 Feb 2003 9PM

See the graph. Somebody must have simultaneously sold large amount of gold futures and bought huge amount of stock. At 10AM today and 2 days ago. There has to be a common cause from the outside of those 2 markets, otherwise one would be delayed with respect to the other, while they are in fact simultaneous!

BN - Bear Bulletin Thu, 27 Feb 2003 11AM

Subject:         BN
   Date:         Wed, 26 Feb 2003 22:28:15 -0600
   From:        Stan P.
   To:            Stan B.

Oil & NaturalGas has reached a 10 year peak. Inventory is down to zero. Same for Nickel, which is quite surprising. Central banks started
selling gold again. This all will eventually suffocate the economy. profits are close to nil already. An extra tax on everything, lasting long enough will eat onto profits. The chinese had their first ever oil-related deficit! This smells like inflation. They will have to pass cost to customers. I think "they" know, but can do nothing. So "they" just don't talk about it. But, in about two months Q2 reports will come out and the extent of the damage will become obvious. AMR will go bankrupt in a month. The unions will not budge. Some of their pilots make a quarter of a million. The Iraqi situation is unpredictable, except it will last longer then anybody expects. This bodes poorly for the economy and the US$. Moral: The king is almost naked. Something is got to give. Very quickly. The climax is coming. Some will not survive. Changes will be quick. Nobody believes the gov't any more. Take banks. Instead of solving their problems they paid a few mil to the gomint. They have solved nothing and their will NOT get away with it. Until now they managed to patch the crumbling house of cards with fresh investors money. There is no more fresh cash. If Saddam somehow falls quickly that will patch the system for a few years while solving nothing. I no longer believe it. Bush has lost PR campaign. Too bad. "They" are running out of patching compounds and an ability to control events. The final blow is creeping in: inflation. I can see it quite clearly. It is coming. The companies could not raise prices because they would lose market share. They just cut into profits. Now, even Chinese are losing money and running a deficit. They can't do it for long. So the inflation will come from abroad. It will be imported like everything else from China. ... [personal message deleted]

Re: problem solving

For some strange reason "problem solving" has become dirty words. This was my observation from dealing with the big corporations. On the first sight, this also seems to apply to any big organizations such as government, education, science and the churches. May be it is specific to the dynamics of the big institutions or is it the 20-th Century culture - I am not sure. It appears that anybody from within or from the outside proposing to solve a problem is immediately ostracized in some subtle or not so subtle way. Even more so if the solution works. This is one reason I opted out of working within them, like for example M. which was hell-bent on "managing" problems rather then seeking solutions. It was very funny when I look at it from the perspective - it turns out that those who were trying to solve the problems were in fact feared most and kept in isolation. Such people elicited more fear then the problems themselves, even so these (i.e. lack of new products and slow and wasteful development cycle) lead at the end to about 50% of the staff loosing their jobs. Somehow people in this culture tend to be afraid of us, even though they would, by and large, benefit from working closely with us and from giving us some support rather then a shrug. It is all the more strange given the fact that most of the types like us are not really into power plays that much, thus in theory, we should be less dangerous to the management and the organizations, than the more career minded individuals with the administrative & managerial backgrounds.

The inflation and industrial credit insolvency are IMHO the symptoms of such attitudes. Government and banks did not and do not really want to solve the inflation and credit problems. They were and are probably more interested in covering them up. This was and is irrational - it was exactly the same in 1969-1973 when US came off the gold standard, inflation started rising which culminated in gold and oil prices rising slowly then explosively. What did the governments do (except Swiss) - instead of curbing credit expansion they started selling gold, which they believed they no longer needed. This provided them with a once off relief and bought them probably a couple of years. Eventually the Au prices caught up then overshot. Inflation went from raw materials into the general market, and since most corporations were then very heavily indebted - it crippled the economic growth leading to a condition called stagflation. If you remember these days, economy started growing again only in the early 1980-ties when a completely new industry has came out of the basements and "garages", and without debt. It probably acted more like trigger rather then a locomotive, still I don't think this was accidental.

Stan B.

StanInvest Mon, 24 Feb 2003 9PM

More gold and inflation

From: Feb 24, 2003 11:21 EST Prospector Asset Mgmt
http://www.kitco.com/reports/pa/feb-24-2003.pdf

And, last week, economic news underpinned the gold market with the release of the PPI, showing the highest rate of inflation in 13 years. Factor in the burgeoning trade deficit, the growing governmental deficits in the USA, and the continuing death spiral of the USD, the probability (or should we call it certainty?) of higher inflation and investors will continue to seek

This is interesting how some analyst are proving that absolutely positively we are dealing with inflation while some other - deflation!

I also had to correct Saturday's diagram. This is in fact much more complicated. The proper phase diagram should probably be 4 dimensional: that is RIR, NIR,dRIR/dt and dNIR/dt. Plus, the investment would have to be quantified in terms of ROR figure. This is probably a good subject for a PhD thesis. I don't really have time for that right now to do it properly, but it is a subject that would nicely yield to mathematical modelling.

Stan

StanInvest Sat, 22 Feb 2003 3PM

Re: gold and Europe

Recent lowering of the US interest rates coincided with dollar depreciation and a corresponding increase in gold prices. The same will probably happen in Europe. This is just an observation. As for the theory - theory would probably link the price of gold with the real interest rates (broadly including bank deposits and perhaps stock appreciation and bond yields). The real interest rates are equal to nominal interest rates minus inflation. The real interest rates were negative in 1979-80 to the tune of about -10% (when gold peaked at 800$/oz) and are around zero now, getting towards negative values because inflation is 2%, (much higher in oil and gas, which will filter out to consumer goods in about 6 months) and picking up, while the nominal interest rates (inter-bank or Fed Res. lending rates) are 1.8% in the US and are still declining in Europe. European economy is in a recession but is not as f...ed as US because it hasn't relied to such extent on the stock market and debt driven consumption, with the exception of the huge corporations. These are f...ed indeed but the rest of the economy is not because it didn't rely on the excessive credit. If you were a small or medium sized company in Europe you would simply not get any credit because the banks followed different policy. That's why it didn't grow as fast even at the height of the tech bubble, but for the same reason it won't probably fall as much. Dotcom scams did exist but weren't nearly as common as in the N.America.

I just realized that the above conclusion could be perhaps generalized based on some commonsensical logic, have a look at the following picture:

1) Real interest rates are moving towards positive and high, and nominal rates are moving towards high. [Note: the previous statement should probably be corrected to: 1) Real interest rates are high, and nominal rates are high and moving towards low. Such situation indicates inflation (late stage) under control with economic expansion, or over-reacted like in the 1980-ties or Poland early 1990-ties. Currency trend is towards strength. Best investment are probably bonds

2) Real Interest rates are moving towards positive, nominal rates are moving towards low. Swiss syndrome - strong and stable economy but slow growth, strong currency. Best investment seems cash, perhaps property.

3) Real rates are moving towards negative, nominal are moving towards high. Inflationary economy in the early stage, not fully controlled. Depreciating currency. Best investment is probably gold

4) Real rates are moving towards negative, nominal are moving towards low. Currency looses value but economic growth cycle is resuming due to low nominal rates. Best investment seems property. Early to mid 1980-ties stage.

5) Real rates are close to zero, nominal are medium. This is situation seems typical to the middle of industrial (mature) expansion cycle. Currency is stable which is favorable to paper assets. Best investment seems stock.

Stan

Stan P. wrote:

Hello Stan http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&refer=topsum&T=markets_box.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&box=ad_box_all&tag=financial&middle=ad_frame2_topfin&s=APld9TxWmRHVpc2VuIt the Europe central banks cut interrest rate 0.5% then the Euro will fall against US$ and so will goldI think they will do it. The indecisive euro-beaurocrats are just waking up to the fact their economy is f..dS

StanInvest Thu, 20 Feb 2003 6PM

To: Stan P.

Very good article. Combined pension liabilities of S&P500 companies of $243 billion at the end of 2002. That is, so far that much. Since the stock has 99% probability to go in only one direction (!) this problem will be growing. It is interesting to notice that this disease seem to be affecting only those corporations that had pension plans, that is all big ones! Another comment I would have is that this is exactly the same as in the 1970-ties. That was one of the reason of the "Nifty-Fifty" (=blue-chip) collapse around 1976. If I remember correctly about 25% of those disapeared altogether through buy-outs or closures, and the remaining stock has crashed and never really recovered until the 1990-ties. Our often mentioned favorite company "Fuckent" is one of their offspring.

Another interesting article (continuation of our CEO'nistas series):
http://redflagsweekly.com/kendrick/2002_dec06.html

Subject:        BN
   Date:         Thu, 20 Feb 2003 14:22:05 -0500
   From:        "Stanley P."
     To:         stanb at ptbo.igs.net

Czesc Stasiu

Przeczytaj ten artukul. Zadko sie zdarza tak czysto postawiony problem:
http://www.bloomberg.com/feature/feature1045752633.html

StanInvest Wed, 19 Feb 2003 11AM

To: Stan P.

Business Graveyard.

Re: option a property and become a gold miner. Software is out, gold is in. Live long and prosper!

You must have noticed that about 5-10% of all Australian mining companies listed on that link you sent me have transformed themselves into high technology companies (probably in 2000). We can easily guess how did their "fortune" progress. I am sure they would have loved to go back into gold but I don't think they will be able to:
first, it is much more difficult to obtain new funding now, secondly they do not and probably never seemed to have an expertize in mineral prospecting (nor in high tech for that matter).

[rant ON]
A big problem with the current business culture is that it is totally dominated by people with purely financial and biz administrative background, who by and large don't seem to understand nor appreciate any kind of technical, engineering or any other skill than they do not posses themselves. Their failure rate is so attrocious because you can achieve only that much by shuffling money & stock from one pocket to another. Eventually somebody will have to dig that damned gold out of the ground or design and manufacture and sell that new latest greatest networking gizmo or whatever product or service that might be. I have taken the trouble to copy and paste those failure cases (see below) because they neatly illustrate that trend. [rant OFF]

Na razie,
Stan

-------

Extracted from: http://www.abelle.com.au/

Alliance Gold Limited (AGS) Gold explorer developing healthcare IT interests.
AMX Resources NL (AXR) Now an IT company after selling off its minerals interests.
Avon Resources Ltd (AVN) Mineral explorer diversifying into energy infrastructure
Burdekin Pacific Ltd (BKS) Australian & Fiji mineral explorer with IT interests
Cobra Resources Ltd (CBO) Juniour explorer with IT & textile interests.
Coolgardie Gold NL (COG) Now Smarttrans Holdings Ltd an IT co. with mineral exploration interests.
Defiance Mining NL(DEF) Renamed Medical Monitors and out of mineral exploration.
Duketon Goldfields NL (DGN) Disposed of mining assets and now a biotechnology company
Energy Equity Corp. Ltd. (EEC) Now Energy World Corporation Limited
Fimiston Mining NL (FIM) Now Excell Diagnostics Limited
Grenfell Resources NL (GRN) Renamed Gravity Capital & exploring using BHPB Falcon technology.
Hallmark Cons. NL (HLM) IT company with Ni interests in Cawse Extended areas, WA
Hillcrest Resources Ltd (HLL) Former mineral explorer & now diversified investment company
Horizon Mining NL (HZM) Now Horizon Global Ltd & intending to become a technology company
Intermin Resources Ltd (IRC) WA gold explorer with other technology interests
Julia Corp Ltd (JLA) Mineral explorer with IT interests
Livingstone Resources NL (LVN) Now WebSpy, an IT company.
Mogul Mining NL (MGL) Delisted after moving into an internet business
Nexus Minerals NL (NEX) Mineral explorer turned IT company as IPT Systems Ltd.
Phoenix Mining Ltd (PHX) Now Dolomatrix International, an industrial company.
Quadrant Australia NL (QAD) Now Quadrant Iridium Ltd, an IT company
Reef Mining NL (RFM) Past Victorian gold explorer & now International Concert Attractions Pty Ltd.
Resource Exploration Ltd (REE) Explorer turned venture capital company, Futurexone Ltd
Shield Telecommunications Ltd (SQS) Former venture capitalist, now Afminex Limited
SMC Resources Ltd (SMU) Qld gold miner now Powerise Technology Ltd.
St Francis Mining NL (SFM) Exploration co., now the St Francis Group Ltd, an industrial co.
Strike Mining NL (STM) Gold explorer turned IT company, Select-Tel Ltd
Tanganyika Gold NL (TGO) Name change to Renewable Energy Corp Ltd & into 'high tech'.
Timor Sea Petroleum NL (TSP) Name change to escape3d NL and assets distributed.
Union Capital Ltd (UCL) Mineral explorer and technology investment company.
Vengold Inc (VEN) Gold miner turned IT company, Itemus Inc, which went bankrupt

Subject:          BN
   Date:          Wed, 19 Feb 2003 09:38:31 -0600
   From:          "Stan P."
     To:           "Stan B."

Never heard about Divine before, but I love it. Maybe I will invest in them. After all they are not going bunkrupt, they are exploring strategic opions. I have a very good suggestion for them: option a property and become a gold miner. Software is out, gold is in. Live long and prosper!
s

Subject:       Re: BN
       Date:     Wed, 19 Feb 2003 09:44:10 -0600
      From:     "Stan P."
        To:       "Stan B."

Right. I think he had accomplices. Nobody pulls a trick like this alone. They knew how it was going to end so they kept low profile. Everybody will keep quiet now, including the authorities. Like in the credit card fraud lets "keep it in the family" or people will get "wrong ideas"

BTW I like your bulletin.

       ----- Original Message -----
       From: Stan B.
       To: Stan P.
       Sent: 18 February, 2003 21:59
       Subject: Re: BN

I just read that article. Of course if you give a guy power he will use it for his own benefit, but - where were the other board members and the investors?! Surely when a CEO is milking a hospital for a hundred M$ this has to impact the other employees pay checks negatively. For 20 years? Where were the employees? A dictator is never alone! A dictator needs an audience, he needs acomplices, he needs team-players and he needs victims. A dictator operates within a culture. Hitler could not have succeeded in Poland for the same reason that he could not have succeeded in Italy or in the US.

Stan

Stan P. wrote:

Dear Stan, Have more fun: http://www.bloomberg.com/feature/feature1045579459.html
How do you like our finance minister trying to bribe you with your own money?

Do you think he will manage to buy the position of prime minister?

StanInvest Tue, 18 Feb 2003 12AM

To: Stan P.

It took them a long time or better late then never.

This announcement has awaken my curiosity:

http://search.news.yahoo.com/search/news?p=DVIN&a=1&n=10
Tue 9:14am DVIN Divine May File for Bankruptcy - Reuters

then I found this:

http://www.f---edcompany.com/
Bovinity divinity
Rumor has it Divine will finally file bankruptcy next Wednesday, 2/19/03.
When: 2/14/2003
Company: Divine
Severity: 100 - new hall of fame inductee!
Points: 197

(BTW: it is very interesting to compare the amount of relevant details in the Reuters versus FC information, and FOUR DAYS EARLIER. Keep in mind that FC is just one guy!)

This is a very interesting study of corporate ineptitude and tunnel-vision most likely, probably not a fraud in this case. Divne does not acknowledge it in their current prospectus, but it used to be a so-called "business incubator" during the internet bubble days, which after the crash of March 2000 cleverly transmutated itself from being an investment company, into one of their web "software" companies. It worked, well at least it provided employement continuity for their top management. Surprisingly some serious investors didn't realise the fakery and kept pumping real investment cash into it long after the internet software stock went out of fashion. Which Divine of course used up to continue making "smart" acquisitions at "bargain" prices (e.g. Delano). Old habits die hard. See for example this:

http://www.delanotech.com/Press/News_Releases/2002-05-30newequity.asp

DIVINE Secures over $61 million in new equity financing divine Positioned for Profitable Growth CHICAGO – May 30, 2002 – divine, inc., (Nasdaq: DVIN), a leading provider of solutions for the extended enterprise, today announced that it has secured equity financing totaling more than $61 million from a group led by Oak Investment Partners, one of America’s oldest and largest venture capital firms. This investment, in combination with ongoing expense reduction efforts[=layoffs, S.B.], positions divine to achieve its goal of profitability by the fourth quarter with substantial cash reserves. “During the past year, we have aggressively executed upon our strategy of building a critical mass [=they couldn't make money as a small business but they surely will when they grow bigger, - right! S.B.] of offerings to support the Extended Enterprise. ...

It is also interesting to look at their stock performance. This is extraordinary but also educational. The long dome-like rises are probably indicative of the investors optimism and patience with the stock (!). The triangular short-lived but vicious downward troughs are probably indicative of the sanity induced sell-offs. Nevertheless the overall behavior shows that the investors liked hanging onto the stock (all the way from 300$ to 0.2$) rather then dumping it straight away as is more typical of the mining sector, for example.

http://finance.yahoo.com/q?s=DVIN&d=c&k=c1&a=v&p=s&t=5y&l=on&z=m&q=l
http://finance.yahoo.com/q?s=DVIN&d=c&k=c1&a=v&p=s&t=2y&l=on&z=m&q=l
http://finance.yahoo.com/q?s=DVIN&d=c&k=c1&a=v&p=s&t=3m&l=on&z=m&q=l

Na razie,
Stan B.

StanInvest Mon, 17 Feb 2003 6PM

To: Stan P.

Czesc Stasiu

Please keep this one private. [OK I will remove & substitute all names, S.B.] Some two months ago my favorite gold analyst on TV mentioned a very interresting [Elbonian] gold prospect. I haven't checked immediately and I could not later identify the company. I used the wrong Google keywords. Anyway, I found it today and I want you to have a look. The company is [Old Dog in a Desert] . Though the stock has doubled recently there is only 20 mln shares and the market cap is still very low. I agree it is a crapshoot, but if their resources ever will become reserves then this is one of the largest deposits I have seen so far. Also, at 2.5 g/t the grade is quite high for a bulk tonnage deposit providing they can use an open pit mining method. Gold is fashionable now and it is strange this one got skipped. Few reasons:

1. It has already quintupled in a year.

All gold mining stock written by every analyst I have ever read, without exception, seem to have already quadrupled in the last few months by the time an article or TV program is published. I don't think it is a coincidence, neither do I believe that these analysts are so genial to have ALWAYS picked up such "good" stocks. I drew my own conclusion and I am trying hard to avoid stocks being mentioned on free bulletins and on TV. If I buy such (I did it a few times) I have developped a procedure to quarantine such stock: I write it down in a notebook, forget it for a months or two, then come back to it to review #1 - its stock price chart, then - long-gap-nothing- and at the very bottom: #2 - recent financial reports.

2. At $1 price seems high

Impossible to figure out because these companies on Vancuver exchange seem to publish s..t nothing. I don't know how to count gold in the ground without knowing about all details. By the time you figure it out you will almost be like full time employee by them, working for free.

3. There is no feasibility study.
4. Vancouver has a very bad reputation.

Deservedly so. I was surprised that they even survived the Bre-X scandal. Nevertheless it would not deter me. I think Vancouver may be a good starting point for the junior prospectors, may be because it is easier to get in. Most however seem to be switching to a better exchange as soon as they establish themselves (like for example Or.). That's the problem with the "Old Dog in a Desert". This is NOT a junior company, what a hell are they still doing there ? Perhaps there is a reason that we don't know of ...

However, the guy who recommeded it had a 150% total return in his RBC Royal precious Metal Fund and as recently as last friday jumped the ship to be a partner in a privatly run gold fund. He is good. Of the current gold prospects he highly recommends Or., E. and this one.

I am skeptical about listening to such fund managers. I doubt if he became rich by giving free stock tips on TV. Or may be he has, but not in the way that we initially thought. This is just an impression but I would trust more (though not uncritically) some academics and book authors like Prechter or Puplava, or even some journalists, then the professionally active traders. I simply refuse to believe that a stock trader would give away any good stock tip for free. However I can imagine that they might perhaps share some useful and insightful general comments pertaining to the overall market, sector, or gov. policy.

I have my doubts about Or. . It will produce 60,000 oz/year. Even at the current $350 price I could not find any producer below 100,000 oz who would be profitable. Generally their admin cost and drilling costs eat all the profit. Or. may go to $1.5, no more. E. is a mid term investment. They are doing bankable feasibility study right now. But their grade is less then 2 g/t. They are still considered undervalued, but If gold falls they are going to be hit very badly. [Old Dog in a Desert] is anybody's guess. The institutions are not in because the resource is small and it is a micro cap. But the reserve is 1 mln oz and inferred another 1 mln oz. If this gold can be mined then we are talking 200-500 mln market cap. Even considering big stock dilution it may be a very good risk. If you are interrested so far then please make a serious search of your sources. At $350 gold is only mildly overvalued now and will probably stay here.

Stan the freshly minted bear

Re: Overall impression on the "Old Dog in a Desert"

My initial impression is negative because of the way their stock chart looks, and because I cannot reconcile the information that they seem to have 1Moz in the ground yet in 20 years of the chart they seemed to have gotten literally nowhere! We could only speculate but it could well be the management problem, legal right, speculative entanglement, bad and/or hidden debt (=very likely!). However, the last 5 years look technically positive. So the overall assessment ? Hard to say. My preference is to stay away from stale products.

Pytanie: Jakie jest twoje wrazenie odnosnie Celestica CLS. I have made an accidental discovery. They have $12/share in cash and no debt. This puts the value of their business at 4.50/share. (They have $18 book value, but means nothing) . Assuming even a conservative P/E of 8-10 this would require earnings of 0.45-0.55/share to support the price. With 186 mln shares this would require about $100 mln of earnings per year or $25 mln per quarter. With revenue 1.5B to 2B per quarter this requires less then 2% profit margin.

#1. They seem to have caught a "head-and-shoulder" disease in 2001, which technically indicates a long term downtrend, which is also consistent with the overall sector being in a recession.

#2. They have the third (last) leg of the downward Elliott's wave ahead of them. The wave started in Dec'02 and, if Elliott is applicable they should go slighlty up to may be 13US$ any time from now (by about 20%). After about 1/2 months of the upward correction, may be around the beginning to mid March they should resume the last fall of the current Elliott cycles which may bring them down eventually to around 7US$ after 1-2 months of falling (that will be April-May) when they reach a new bottom.

#3. Look at this:
Parachute-Anyone?
(I borrowed your expression - i hope you don't mind. It's perfect!)

#4. Net Inst. Selling: 3.25M shares (+2.97%)

#5. Institutional: 49% (72% of float)

#6. Celestica is one of the biggest Canadian flagship stocks, under the spotlight of all the analysts. A chance that we discover some yet unrecognized and undiscounted hidden "value" are probably equal to zero.

#7. 8$ of cash per share, at share price of 11$ and 3.1% of stock being shorted - that does not make a sense! We are either dealing with Kamikadze short sellers (unlikely) or they may know something about those 8$ of "cash" that we don't (more likely). Two things spring to mind: (a) future short-term obligations, and (b) undisclosed liabilities.

#8. I know from dealing closely with it, that the electronics manufacturing, especially contract manufacturing is in totall doldrums. Everything viable in this business that could have been repatriated to China has already been moved over there. There are only small series prototyping, R&D or very small volume runs (like my project with Quantized), which make sense doing locally. They don't stand a chance unless they completely restructure and unless they change their business orientation. Frankly I was surprized that they still got as much as 8$/share of cash left, after 3 years of recession. They will certainly need it.

As the last section I will pass on an interesting junior gold prospecting & investing stock:

SSSI.PK - Renaissance Mining (bought out all defunct Sedona Software stock to get listed)

It was recently (Jan) launched to private investors at 3$ (they do seem to have tangibles, so they say!), then went up trading publicly up to 10$ a share, Then after a few days the stock got promptly suspended when they discovered that the director of the company A.Wiley is a nephew of a three-times convicted Canadian stock scam artist (also Wiley). The stock is now trading at 0.9$ . Tremendious value, who knows 8-:) At least when I buy it and it zeroes I won't blame anyone.

Na razie,

Stan B.

StanInvest Sat, 15 Feb 2003 8PM

To: Stan P.

Gold, forecasting and everything.

Yes we are getting better but IMHO still not good enough. I would at least prefer to have that knowledge before the stock moves, not afterwards. As for gold, the reason I knew that it had to go up from there was because of the accute historical similarity and the general tendency for the corrupt governments to botch the currency, inflate money and credit a la E.Gierek, B.Yeltzin, Suharto, I. Gandhi, Galtieri, and 120 other incompetent and/or psychopatic thugs, rather then contracting it a la A.DeO.-Salazar or E. De Valera. The latter were the rare exceptions and belonged to a different epoch. Please notice that the currency-spoiling game is not over yet. Even if Greenspan manages to kill Bush's "stimulus" he will invent someting else, I am quite sure. Politicians are in a sense very clever. Taxes will also go up because of the war and deficit. You have all classical elements of late Gierek's or Argentina, albeit in different quantities. Only, since free market is a lot more efficient - inflation may reach perhaps 20% not 200% as in PRL. The principle is the same - too much money and credit in relation to the amount of goods and services available. The argument about US being a global economy makes it more similiar to Gierek rather then less. Just as Gierek's and Argentina's economy were isolated because of the low exchange rate and lack of foreign currency reserves, US economy is in fact also isolated - within the whole Earth. For example you can treat Chinese economy as part of the global-US market too, and $ has been a global currency. Asia has less and less reasons now to buy from the US then ever. I know this from my experience in the DVD test equipment. Everything is locally available, with the exception of some specialty products and services such as ours. The reason why did Asians held onto $ was probably the issue of political stability during the cold war and buying the military supplies. These reasons have already changed. Most Asian countries have realised that Americans won't and cannot bail them out from China. There is also a big issue of wages and price imbalances between Asia and US. Which can be looked at either as the $ value reflecting some inherent advantage of the US economy or as a passing anomaly which may be rectified as more world will become (economically) like the US. It means that either the Chinese managers, scientists, engineers and salemen will be paid nominally more until their wages equalize , or their currrency will appreciate until the wage disparity will be reduced - either case is equivalent to a relative depreciation of the US $!

Re: geniusz polityczny od N.

Nie musisz wcale zakladac ze jezeli facet interesuje sie polityka i rozgrywkami personalnymi to musi byc od razu niebezpiecznym dla otoczenia. Moze byc on calkiem do rzeczy i sympatyczny, to zalezy od konkretnego przypadku. Najlepiej wykonaj test na psychopatie - to sie objawia przede wszystkim zanikiem uczuc i emocji lub tez uzewnetrznianiem ich w karykaturalnej formie (n.p. kocha do szalenstwa psa ale juz nie potrafi przyjaznic sie z ludzmi). Jednym z dobrych testow na atrofie emocjonalna bylby gdybys mu np. powiedzial ze jest ci zle, zle sie czujesz, nie mozesz pracowac itp i potrzebujesz 5 dni zwolnienia (mozesz po prostu udawac albo i nie jezeli naprawde potrzebujesz wypoczac). Obserwuj uwaznie jego reakcje, w sensie - czy wykazuje sympatie, wspolczucie, zainteresowanie, probuje pomoc, lub czy tez zachowuje sie bardzo formalnie, robotycznie itp. To latwo od razu wyczuc.

Re: Bombarier, Barrick and other corporate f..ups

Totally agree! The time of easy "business" by spinning is gone. This is a huge transformation time we are living in - the real "Earth Changes" taking place in the economy. In particular, Barrick's hedges are supposed to be spectacularly large and beyond control, according to Chris Temple's Jan 2-nd article on Kitco titled ".... Death-defying Barrick hedges". JPM is supposed to be heavily entangled in it. If these hedges are as big as the author implies then one of those two will probably take a hit, it means that either ABX or JPM will not be among us in the not so distance future, in the form as we know.

Re: jobs

Stan, we have outgrown "jobs" as people understand the term. New quality is required, new thinking. This is a natural process and people who cling to the old way of job-life will have to go through a hell until they let go. This has already begun to happen.

Na razie,
Stan B.

Subject:           Rio Narcea
   Date:            Sat, 15 Feb 2003 10:31:22 -0600
   From:           "Stan P."
     To:             "Stan B."

I have seen this report. We are becoming really good at finding the snippets of information, these REALLY important. I knew they were hedged. Most mines are. They are forced into it by the banks while taking construction loans. I have found a few worse stories. For example, Cambior has SOLD 50% of its future production in guyana as a "colateral" for the loan for $306. When the price of gold goes up the BANK will benefit. Good for them. As to gold itself. I must admit I did not believed it will go so high. That is why I missed it, even as recently as Oct 2002. To me gold is just another metal and the supply - demand fundamentals are just awful. I also have a similar experience while buying stocks. I have tried to catch a "falling knife" several times with disastrous results. When they hit the bottom I had no courage to buy more, I was just hoping to get out. In energy, I am still hoping. You are right about "blue chips". It is all about character. Right now the spin doctors took over. Guess what: the system works. It has already started with small caps and is working its way up. Some "blue chips" will go down the drain before it is over.

[personal]
Dziwilem sie ze moj nowy kierownik nie angazuje sie w projekt i tak niewiele o nim wie. Mylilem sie katastrofalnie. On nie chce wiedziec. Zaskoczyl mnie przedwczoraj fantastycznie gleboka wiedza o "kto spi z kim" i "kto pod kim dolki kopie" w biurze. Prawdziwy talent. Gotow wloczyc sie do "akcji" tam gdzie to jest "naprawde wazne" czyli w polityce. Naprawde jestem pelen podziwu. W 3 miesiace zauwazyl rzeczy ktorych ja nie dostrzeglem przez 6 lat. Prwadziwy geniusz. (przyszedl z N.). Mysle ze ma wielka pzyszlosc w B.
S

Subject:        BN
   Date:         Sat, 15 Feb 2003 10:07:30 -0600
   From:        "Stan P."
     To:           "Stan B."

Witaj Stasiu
I have decided to share with you an absolute zero of corporate governance I have stumbled upon today. A quoote from "National Post"
"Bombardier misstated number of planse delivered" "... The ... transportation giant said Wednesday it delivered 239 regional aircraft last year. Bombardier said the number is actually 213...." It looks like one cannot believe anything these guys are printing these days. They are still playing the numbers game.

Another story. Barrick replaced a CEO. Their hedge book is a disaster and their production levels plummet. But instead of hiring a mining
engineer who could fix production problems they have hired another financial guru ie. spin doctor o mollify unhappy investors. They will get
what they so richly deserve!

The job market in Canada is a disaster. Despite what the gomints say just try to land a job here. Nobody is hiring.
At least not in tech.

See you soon
Stan

StanInvest Fri, 14 Feb 2003 2PM

To: Stan P.

Rio Narcea sucks!

I knew that something was wrong. Now we know what. Remember we were talking about that company and could not find anything wrong with it, except that in the last 5 years they had absolutelly utterly no profit whatsover. Which was strange for a quite mature company with a supposedly viable mine and infrastructure.
See this report:

http://www.kitco.com/pr/1133/article_02142003133759.pdf

Toronto – Rio Narcea Gold Mines, Ltd. is pleased to announce that it has considerably reduced its hedge position giving the opportunity for its shareholders to benefit more fully in future gold price increases. The Company has closed out its €405/oz (=US$437/oz) gold calls representing 82,736 ounces. This transaction was financed with the proceeds from the recent equity placement. After the transaction Rio Narcea is left with only €405/oz (=US$437/oz) calls on 111,418 ounces from now to mid-2005 and a small forward sales contract (13,647 ounces through 2006 at US$301/oz). ...

Even though the Company remains optimistic on the future of the gold price, it is keeping its downside protection with puts at US$280/oz and €300/oz (=US$324/oz) for the sale of approximately 70% of the planned production through 2006 from the El Valle and Carlés mines. ...

In 2003, the Company plans to produce approximately 155,000 ounces of gold at a cash cost of US$125 per ounce from its 100%-owned El Valle and Carlés mines.

*** The sods are still almost fully hedged! ***

I didn't know that.

[rant ON]
The first ever stock I bought in Canada in 1997 was ABX, I bought 20 shares for 18C$ a share. I sold them 5 years later for 23C$ a share. This was the worst deal I have ever made and I really despise these f..ers. I am a lot more cheased off by their non-performance (remember - I bought them when gold was 260$/oz and I KNEW back then that gold was going to go up from then on). More so then by some other stock I bought that really tanked. But, when we buy a highly speculative stock you take the risk. It's all right. When on the other hand you buy a supposedly "blue-chip" - you expect a solid performance! ABX stopped me in my tracks, I stopped buyng gold then and missed great many opportunities. This taught me BTW that there is no such thing as a "blue-chip" stock. You remember during our discussion that I was always very sceptical against buying big and well known companies, there is just as much risk but it is hidden, they are also run by shady individuals and on top of that you have almost guaranteed that they will not make you really rich and even if they do go up they do it with a grace of a lead baloon.
[rant OFF]

Another interesting (though quite biased) articles:
http://www.gold-eagle.com/editorials_03/clawar021303.html
http://www.globeandmail.com/servlet/ArticleNews/PEstory/TGAM/20030214/RBEST/Business/business/businessColumnistsHeadline_temp/1/1/5/

Na razie
Stan

StanInvest Thu, 13 Feb 2003 11PM

To: Stan P.

Since gold has reached an overnight low of 346.50$/oz on its way to 250 (just kidding) it is probably a good time to review what do the experts say.

Prospector Asset Management:
http://www.kitco.com/reports/pa/feb-10-2003.pdf

Yes, it can be considered "overbought" if you take into account a very small circle of gold investors, central banks and gold producers. On the other hand gold has always spent most of its commercial life sitting happily in the vaults rather then being hauled around. This situation is not abnormal from the historical perspective and no different from the year 1900, 1800, 1700 etc.

J. Kaplan is painting a picture of an extremely overbought market like for example in stocks in 2000 when literally everybody was overinvested in dotcoms and tech stocks. Yet it is a very different situation in gold and PGM as the circle of game players is very small and hermetically sealed, for the time being. This is the same difference as in thermodynamics dealing with a big isolated system when the total energy is constant and entropy must always rise, versus a small embedded non-isolated system when it can go up or down.

No, it is logically impossible to generalize that there is no more investors to buy. Prospector Asset Management analyst is probably wrong by generalizing something that applies to a closed system in the case of gold which may or may not re-connected to a much bigger investment market. If that happens then all hell will break loose.

At the same time it is of course possible to envisage a situation when gold may drop in price. In order to do so the US gov would have to tighten the money supply, forget about "stimulus", strengthen the dollar and deflate prices of most goods and services. In other words they would have to curb the irrational exuberance by sucking out even more cash and credit out of the market.

From my point of view this is a moot point since if it happens - everything (especially STOCK) will drop as well, so the choice is not really between gold and other stock (that I think has been clearly answered since 2000), but between gold on one hand, and cash plus bonds on the other hand. Take your pick. Note that if gold is trading at 250$ and Nortel Notworks at 120C$ again, I will eat my hat!

Na razie,
Stan

StanInvest Tue, 11 Feb 2003 10PM

To: Stan P.

Re: "...except that I thought there may be something wrong with my computer, my ISP or conspiracy by Microsoft."

Most programmers probably thought so too. I did not because I am a contrarian and not a team player. That's why I jumped when I saw that memo because it assured me that I might not be completely crazy!

Re: "They will go the way of Digital Equipment or Xerox (or Miltronix) and for the same reason I
suppose (screw the creative guy)."

Their business demise is of their own choice because they adopted a belief system where marketing ideas were paid 3 times more then new product ideas and their implementations (=240000/80000). They espoused the culture which paid PR and HR execs more than R&D and production managers. They got exactly what they wanted!

Re: El Paso and Mr. Wise
http://www.thestreet.com/_yahoo/stocks/melissadavid/10068137_3.html

In a letter from Wise himself, El Paso informed employees that the company was suspending its matching contributions to the staff's retirement savings plans. Wise estimated that the move will save the company $33 million a year. "The decision to suspend the RSP match has been a difficult one, and I understand that it will affect many of you," Wise said in a Jan. 28 letter. But "it is imperative that we continue to respond in order to deliver maximum value to our shareholders." Saddled with fresh sacrifice, employees will no doubt be watching for any signs of a generous "parachute" for Wise that would cut into shareholder returns. Their CEO has already drawn criticism for collecting huge paychecks even as El Paso's fortunes have eroded. Last year, Wise was in fact ranked as one of the best-paid CEOs -- trailing only CEOs at Tyco (TYC:NYSE - news - commentary - research - analysis), Qwest (Q:NYSE - news - commentary - research - analysis), Enron and AOL Time Warner (AOL:NYSE - news - commentary - research - analysis) -- at the helm of a company under federal investigation.

This is brilliant! It remains me of another article when they found a negative correlation coefficient between the CEO pay and the performance of a company. Still, I think the biggest problem is not a particular CEO stashing too much cash at the expense of retirees, but IMHO the totally gutless managerial "culture" of the 1990-ties, that allows that to happen. The entire managerial staff may need probably more testosterone injections or ball transplants.

Stan

Stan P. wrote:

It must be authentic all right or else SUN would cry foul.
Besides, I have the same experience with Java recently, except that I
thought there may be something wrong with my computer, my ISP or conspiracy
by Microsoft. I have not noticed missing characters, but sluggish it is
every time Java applet executes. Microsoft will chew them up. They can
recognize an opportunity when they see one. What's more, this is probably
the end of Sun. An $10,000 workstation cannot compete with $2,000 3GHz
Pentium especially when Windows reliability and security improves. They will go the
way of Digital Equipment or Xerox (or Miltronix) and for the same reason I
suppose (screw the creative guy).

----- Original Message -----
From: "Stan B."
To: "Stan P."
Sent: 10 February, 2003 21:06
Subject: Re: Java

Dead like a Dodo! I new there was something wrong since a couple of
years ago when they "upgraded" from java engine version 1.1 to 1.2 and 1.3
all browsers started suddenly crawl like snails, loading much more slowly
and became very flakey - all 3 that I tried: Netscape, I/Explorer and Opera.
In addition all the banking forms (incl password entry) became sluggish,
were loosing characters when typing fast and behaved unpredicatabily, for
example when you typed something in the entry window before it loads
completely the effect may render it totally out of whack - some letters may
be interpreted as commands etc. This is not a programming error because
they all behave like this! It is impossible to get rid of this s..t now because
it is everywhere. It's like a disease. One solution is perhaps to let Microsoft
or somebody like Linus Thorvald rewrite the whole thing, and sell a 2-nd
party engine replacement. If this is legaly permitted.
Stan

P.S.
Java sucks alright, but on the other hand, I am not quite 100% sure about
the authenticity of that particular memo.

> Stan P. wrote:
>
> > If this is true then Java is already dead. Microsoft will NOT give them a
> > second chance
> >
> > ----- Original Message -----
> > From: "Stan B."
> > To: "Stan P."
> > Sent: 07 February, 2003 20:10
> > Subject: Java
> > > I can undertand now why is Sum Microsystem in trouble. This is very
> > symptomatic. I even read the whole thing, see:
> > > http://www.internalmemos.com/memos/memodetails.php?memo_id=1321
> > > Stan

StanInvest Tue, 11 Feb 2003 12AM

To: Stan P.

This is interesting indeed! However I am not really annoyed by these people. I consider them petty thieves & they do me no harm, in fact I enjoy following their activities as they do provide a great entertainment. Stan, I have a different philosophy about it. You must have noticed that petty criminals do not really harm us as much as some incompetent or psychopatic individuals placed in some very high position in the political or corporate hierarchies. If a dishonest plumber walks away with 1000$ of my cash I don't care much. I will earn that in a couple of weeks back. However if a director of a corporation blows 5 millions every year unnecessarily by hiring 17 marketing executives (!) and in the same year had to lay off 60 production workers (before Christmas...) to save some cash - then the harm is much greater and usually irreparable. These 60 people have their wealth, work ethics, trust in the company and self-confidence totally shaken. They will not be spending, buying houses and new cars. Besides, half of those 17 marketing "managers" seem already be gone as well, as far as I know. This is a classical 19-century description of the suicidal recession-generating actions of some headless and heartless industrialists.

As for the fake junior gold prospectors, I have noticed that there is a lot of them. They are also the most promoted. They also have some good friends. For example yesterday my favored technical analyst Clif Droke published a report on Kitco (10-Feb) recommending one of a penny stock BPD.V . Guess what - that stock jumped first thing in the morning of 10-Feb by 50% (0.10-->0.15). I wonder if there is any way of finding out what stock is Clif going to promote a day BEFORE he publishes it...

Stan B.

P.S.
Don't get me wrong, I am not riduculing it, I think the guy is a real artist and a pro, he has already published several books on stock investing.

Subject:
       Re: StanInvest update
       Date:           Mon, 10 Feb 2003 21:17:14 -0600
      From:           "Stan P.
      To:               "Stan B."

Have a really good laugh

http://m1.mny.co.za/mgjr.nsf/Current/85256ACE0035918D85256CC70007BE1C?OpenDocument

----- Original Message -----
From: "Stan B."
To: "Stan P."
Sent: 09 February, 2003 12:42
Subject: StanInvest update
> http://www.ptbo.igs.net/~stanb/staninvest.htm
> Stan, I will probably keep updating it once a day or once evry couple of days, depending on time.
> Please feel free to browse it any time. If you like, I can also save there your replies,
> interleaved with my posting. It could be interesting to form a kind of a private bulletin.
> Stan B.

StanInvest Sun, 09 Feb 2003 1PM

To: Stan P.

One of the leading theme in most analysis regarding the recent poor stock performance is that either earnings are not growing fast enough (if at all) compared to the expectations, or the lack of fresh investment capital, or a general uncertainty. The following article is I think a good indication of that mindset:

http://moneycentral.msn.com/content/P39211.asp?special=msn

Jubak's Journal.

Earnings aren't bad, just not good enough Fourth-quarter profit reports are better than expected, and many companies are forecasting modest improvements ahead. Why are so many of their stocks getting hammered?
By Jim Jubak

If you keep in mind the steep rally from last October’s low, the way stocks are behaving this earnings season makes perfect sense. Shares of Intel (INTC, news, msgs), for example, should have dropped by almost 10% in the days after the company reported earnings that were about 14% higher than Wall Street expected for the fourth quarter of 2002. Why did Intel go down instead of up on that report? Because Intel shares had climbed a whopping 35% from their Oct. 8 low as investors anticipated a recovery in Intel’s business in the second half of 2003.
...

It seems to me that:

- Every possible and impossible increase in the stock valuation may have already been priced into most stocks in the post October 2002 minibubble-driven rise.

- Present earning reports have fallen short of those expectations.

- There appears to be a growing expectation that the future earnings may fall short as well.

- October'2002 lows (e.g. Nasdaq=1100 was probably based on more reasonable valuations reflecting the "as is" situation, while the subsequent appreciation must have been an anomaly based on future projections and expectations which may or may not be fullfilled.

- Since the stock investors still tend to and prefer to gamble in the upward direction from the base, it means that we are probably still very far from the bottom. This may perhaps explain the "head-and-shoulder" pattern on most stocks, that is, at certain time scales it forms arches curving downwards interleaved with the negative-going spikes. On the other hand, there exist other investment vehicles which exhibit a reverse "head-and-shoulder" pattern at the moment, that it they form arches curving upwards with the positive spikes.

When the investors exhibit overly optimistic behavior then perhaps the downward fluctuations are short lived while upward swings form prolongued arche-like shapes while the players do not immediately accept that they overbought and may be hanging on to their stocks more patiently than they otherwise would have. On the other hand, when the sentiments are pessimistic then probably the opposite is true - thus we see the so-called "bowls" instead of "head-and-shoulders".

Stan, I sometimes wonder - perhaps some kind of curve-fitting algorithm could work in this situation to discern one pattern from the other amidst the noise? I haven't seen it done yet, I must do some work on it in my spare time.
Na razie,
Stan B.

P.S.
How did you like that "Java" memo? I was shocked! ( http://www.internalmemos.com/memos/memodetails.php?memo_id=1321 )

StanInvest Fri, 07 Feb 2003 8PM

To: Stan P.

I have two pictures today to comment on. The first one is an interesting formation called "head-and-shoulders" exhibited by one of our favored companies. I came across references to this formation quite frequently recently by some analysts. It is supposed to indicate a very long-term downward trend. It is probably worth to remember, even though you might not trust technical analysis (I don't trust it fully either). However this is one of many techniques that may prove useful in conjunction with others.

The second picture illustrates a negative verification of my November extrapolation of the Nasdaq stock index, based on Fibbonacci ratio & Elliott's wave. Either I did it wrong or as they say - technical analysis is great only when it works...

StanInvest Thu, 06 Feb 2003 4PM

To: Stan P.
This is probably a good illustration of the mentality of the big corporations, you were referring to.

From today's: http://finance.yahoo.com

PepsiCo to Stop Issuing Earns Forecasts
Thu 12:52pm ET - Reuters
PepsiCo Inc. on Thursday said it will no longer offer earnings guidance, joining a growing list of companies that have dropped the practice.

After switching to "pro-forma" earnings practice, in the next stage they might just as well drop issuing any financial data at all, why even bothering with SEC reports! It is interesting to notice that the management of the 1990-ties "culture" seem to be completely incapable of understanding who is doing a favor whom, by issuing as much as possible of the relevant company information! They still appear to be believing that the business process must be some kind of a game to catch the investors unaware! Good riddance to them. It is also a matter of time before those sugar pushers will follow the way of tobacco companies.
Na razie,
Stan

P.S.

You wrote yesterday thay they have tightened email security at La Belle, I hope you didn't have troubles because of my emails, from now on I will be sending only to your home address just in case. I could also post my messages/bulletins as a hidden link on my web-site, if it will help you. (To view them you could then just type the URL: www.ptbo.igs.net/~stanb/staninvest.htm ). This would bypass the POP/SMTP mechanism. You could also FTP your own text file in the same fashion there (I would give you my password by phone).

To view the latest StainInvest blog click the link below:
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Stan Bleszynski

1668 Lakehurst Rd.(Buckhorn), Lakefield
K0L2H0, ON, Canada
(705)657-2419 Fax (705)657-8157
http://www.ptbo.igs.net/~stanb
stanb at ptbo.igs.net

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