Patrick, Ron, and others:
Unfortunately, lessons are learned the hard way. Many a Bre-X
shareholder has hung on with huge profits, with a goal to avoiding
taxes, or hoping for higher prices. One week later, and whooops
the whole enchilada is suddenly gone! Never mind losing profits, but
those(primarily Canadians, because they can margin these stocks)
borrowed money on that stock, and bought other shares. That in part
is what is and will continue for a short time to hurt the rest of us.
I can't help but feel sorry for these individuals, as I have to think
that some of them may be in dire financial straits.
We should go back and listen to the wise investors and advisors like
Claude Cormier, who will take some profits on run-ups, enough at least
to cover the initial purchases. We have been suffering from Bre-X
fever, hoping that we hold the next one, and so many of us have
abandoned the tried and true techniques of money management, looking
askance at a 200-300 % profit as peanuts, whereas we should indeed
rejoice at such a gain, and take significant profits. Keep in mind
Bob Bishop's recommendations to take profits along the way. That can
go a long way to avoiding these huge losses that can occur so
unexpectedly in this risky junior resource market.
That type of speculative fever has hurt us and will continue to hurt
for a while. Yes we survived Voisey's bay, Timbuktu, Cartaway, the
diamond play disaster, and this too shall pass.
It was earlier noted that we haven't really taken into consideration
the possible effect of a meltdown in the U.S. stockmarket on the
junior resource market. This is a real question, and Bishop has all
along commented that he would not expect them to do well under those
circumstances.
My problem like many is that I have not taken enough profits along the
way, either. Although I don't hold shares in Bre-x, nevertheless,
like everybody else, my portfolio has taken quite a hit. At least,
most of my share are in companies that I perceive have value, and
in time they will come back. Like Ron says, I'll be delighted to see
them go back to their old highs.
I really appreciate Tony's comments on the Bre-x situation, and his
comments are probably the most inciteful I have seen. It seems to me
that the Barrick due diligence on the Busang property is one of the
keys to the whole matter. I have to agree that the most likely
scenario is that Busang is for real, but that the latter samples may
be in question. Anyway, I too can't believe that two prominent
geologists with combined 60 years of experience could be misled.
The best that we can hope for is that Busang will be vindicated as
a large resource, perhaps not as large as previously thought, but
very significant anyway. At this point, though the damage has been
done, and the investors have lost their stake. It won't matter much
to them, although there will no doubt be many law-suits, regardless
of how the matter shakes out.
In the end, holding companies with value and sound management will get
us through: Ron that's about all we can do now. Selling out if we
don't have to at these prices will turn out most likely to be a
mistake, although going to cash has crossed my mind several times this
week.
Regards
Dan |
