To All,
Took this off the Stockman forum. Might be of interest and further our "education".
Subject: George Chelekis visits the Toronto chapter
Hi Leroy,
Rob asked me to report on George Chelekis' visit to our Toronto
chapter last Sunday. I went prepared to be underwhelmed, because
I thought I recalled that he'd had some kind of trouble with the SEC
lately, and one of the stocks he'd recommended melted down on
me last year.
I found him thoroughly plausible in person, and I recalled that he
had also provided my original Yogen Fruz tip, and has had some other
hits that other investors have enjoyed. He was accompanied by the President
of Anvil Resources, James Lenec, who was not there to push his own
company, but just to join the discussion and share his own perspectives
on the market, having been a stockbroker in Vancouver for ten years.
They both turned out to be very friendly, amusing, talkative fellows.
I'm not sure how much I can say in an open posting about the actual
meat of George's discussion with us in regard to specific companies
- not only because some of it might backfire on him, but because he is a
journalist and internet writer himself and if he wants the information
he shared with us to be public, I'm sure he'll make it so.
He talked about promoters who will help big players who are stuck with
shares they don't want by receiving a lot of paper for themselves in
return for running up the stock price and helping the big players get
out from under a bad deal; and some who will create hype and
churn just for the fun of the game, for "beer money", to the detriment
of the small, naive investor.
I do think that everyone who attended enjoyed hearing what George
had to say, and we'd recommend any other chapter to invite him to speak.
He looked a little beat - too much travel, I'd guess - and was obviously
repeating himself ad nauseum like a university professor giving the
same lecture over and over again, but we were all hungry to hear
every word of it. Several of us scribbled furious notes:
Safe to report, I think, that he fears the market has tanked until
September because of Bre-X; he finds the situation analogous to the
way the year unfolded in 1994 after Band-Ore in Venezuela. Fewer
promos than usual have worked this year, and "May is when all the
PP paper comes off".
Some other gems:
" As soon as the promoter mentions a new story, get out of the old one!"
" Most people buy the stories and invest in the stock; but these stocks are
for trading, not investing. If you want to invest, buy wholesale; if you're
going to buy them retail on the open secondary market, buy them only
to trade them "
" Once you get up to about 30 million shares, you're looking at the
potential of a roll-back, a consolidation."
" If there is a run-up on news of a JV, sell."
" Exploration guys are party animals; mining guys are often just
animals, not nice people at all..."
" Ian Park and Denbury Capital: when they get together on a promotion,
it usually comes together."
" The smart money is now sitting on the sidelines, waiting for the
next good run. Until then, there will be lots of rumours which are intended
to create mini-rallies, in order to blow off unwanted paper."
" Vend-ins are officially at arm's length, but usually create paper for
insiders; cheap promotions give out shares which become free-trading
and create dilution, and the stock quickly drops. How many shares are out?
That's your real float. There's no such thing as shares that can't be traded,
really - there are always ways around the one year rule or any similar
problem."
" The credo of most west coast pros: double your money, then get out;
cash is all you should believe in."
" As soon as a company says they have a find and will develop a mine, get
out - the share price will drop until they prove it up."
" It takes patience in this market to make real money. You have to buy
really low-priced shells and hold them forever."
" Spikes = promotion; high volume in Canadian stocks = distribution, not
liquidity."
" The fundamental question you should ask is, who has the paper? Bear
in mind that good promoter has to have enough of it to make it possible to
do something significant with the stock."
" Who has the stock? Is it a bunch of investors who are unhappy with
it? If so, you have a market "overhang" .
"There was lots more, but that's all I have time for, and probably all you
have space for...
Steve G>) |
