Most Analysts Still Don’t Get It


The Warrant Report
October 15, 2012

Most Analysts Still Don’t Get It


There are a lot of good men and women writing newsletters in the resource sector. All have the best intentions of providing their readers/subscribers will quality content and some good stock picking opportunities.

However, it is how some of these analysts approach their stock selections that are the subject of our thoughts today.

How do they decide which companies to research and to ultimately recommend?

We could probably write volumes on this subject but we will try and focus our views for the sake of brevity.

Everyone talks about People and Properties, People and Properties, People and Properties………

Sounds so damn simple doesn’t?

But many in the business would not know what it means to go with Good People/Good Management.

What the heck does it really mean?

Good Management does not mean just being approached at an investment conference by management of a resource company looking for an analyst/newsletter writer to tell their story.

Good Management/People does not necessarily mean just having 20 plus years in the business, but rather have they actually accomplished something, i.e., were they responsible for discovering a significant resource, taking a company into the development and/or producing stage and possibility selling ‘their’ company to a major mining company and thus creating great shareholder value for their shareholders?

So now let me contrast this statement above with what I just read from another analyst just recommending the shares of a new company to their subscribers.  Obviously, all names will not be mentioned, but the facts are correct.

The President of this small exploration company was being interviewed. Initially, I liked what I heard. A small share structure of less than 40 million shares outstanding and a market price of less than $0.25 and a property in Mexico, ah tell me more….

But we before I even read more, here is what I did, and what I do for all new company names which I hear. Immediately, I look at a price chart with the idea of seeing if the stock is near its high or its low, i.e., have the shares just doubled in value? I want to be buying low. Also, within 2 minutes more, I know exactly what share positions that the management has in ‘their’ company. This can be the most telling factor of all in a search for new opportunities.

Ok, now back to our interview, the analyst refers to the strong management team of this small exploration company and what a good job they are doing.

Really?

What I already know from my two minutes of research is that;

this is no management team that I want to follow
.

Why? First, the President of this company owns only 12,500 shares of stock with a current value of appropriately $2,400.

I wish I was kidding but I am not.

The other members of that ‘strong management’ also have a small or no position in the company’s shares. Sure, they were issued some stock options, but it didn’t cost them anything.

Folks, stock options do not count, not in my opinion. I want to see management with ‘skin in the game’, real money they have invested in the company and they should they have a significant stake….a lot more than I would be investing, assuming that I liked the story.

So, I am already turned off on this story and then see that the company has virtually no cash, hell I have more cash in my account that this company currently does, and the President is wearing many different hats, other consulting jobs, other companies, and well, in my opinion, not focused on advancing this alleged interesting new opportunity being presented to the subscribers of this other service.

Why another newsletter would want to recommend shares in a story like this is frankly beyond my comprehension. End of Story.

All of us in the business as well as you as readers and investors in this resource sector need to be able to cut through the B.S. and get to the facts.

Our service is here to assist our subscribers with making money and reducing risk by reasonable research which is at our finger tips and which we enjoy.

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We trust you are following us at
www.PreciousMetalsWarrants.com
and
www.TheGreedyGuru.com

Each service has its own different and specific approach to assist subscribers in picking the big winners.

“This train is not going to wait for you; you are going to have to jump on.”

____________________________________________

NO ONE ELSE DOES WHAT WE DO; NO ONE!!

We are personally striving for monster gains of 500%, 1,000% or more. This is frequently called a 10 Bagger and this is our goal. Sure, not every position will work out, but on balance, with some good money management and decisions as to what to buy, great gains can and we believe, will be achieved.

 EDUCATION – INVESTMENT IDEAS – PERFORMANCE

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We would also remind you of Dudley’s involvement and spokesman for The Greedy Guru. This service has a totally different approach and focusing on “The Top Picks of the Pros”

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Something to Remember:
  If you like a resource company and they have long-term warrants trading you owe it to yourself to explore this potential opportunity. Not all warrants will meet your test of length of time until expiry or the potential leverage thereon, but this is where we have done the work for you in our comprehensive warrant database. Not familiar with warrants, visit our Learning Center. A few warrants now have expiration dates out to 2017, five years, wow!!

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    Dudley

Dudley Pierce Baker
Founder and Editor

Guadalajara-Ajijic, Mexico


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