Ed, you are right about there being a lot of hucksters and fast promoters in the mining business. However, there are some legitimate mining companies also. It always helps me to read the small print notes in the back of annual and quarterly reports. That's where they'll hide their dirt, if there is any.
Additionally, it is helpful to read their financial statements. I'm especially concerned about current liabilities and current assets. Then I want to know about their long-term liabilities, and I determine what their working capital is. Then, I thoroughly study the rest of their financial statement. Lastly, I call the company. If I'm in the area, or going to be in the area, I'll visit the company.
Unfortunately, we are all dependent upon the company to tell us the complete truth. That doesn't always happen. So, it helps to speak with their competitors. Their are lots of other things we can do but the puzzle is usually incomplete. And sometimes the traditional measurements of a company don't work, but most of the time they do work. The companies provide the information and sometimes they have misstated something. That's why diversification is a must.
I still feel that legitimate gold company shares that no one wants today will be worth big money in the future. I can't think of a more undervalued asset right now. Gold certificates from a financially strong institution look good, and short-term Treasury bills look great at the moment.
I don't think Naxos is a company that can be judged by traditional means, at least not yet. But I believe that in the future we will get to that point. Let's hope that's right.
GOGI |
