>how long.afford to wait..or, how much time...we can't afford not to?<
A real dillema isn't it? This one cuts right to the heart of the investment question. One will get no encouragement from the "street" or the market. AXC has already been priced to the excess of oblivion. In fact at these prices, one begins to ask, "Does someone know something sinister that I do not?" For some, doubt of future prospects and even doubt of one's own analytical abilities begins to set in.
A real simple way to deal with this, and above all to keep the emotions in bounds, is to take the proverbial piece of paper, draw a line down the middle and list the pro and cons. Return to the paper after a weekend of rest and then draw a conclusion. Remember, in these market matters, the markets are dumb and neutral. We are our own worst enemies.
Oh incidentally, these reviews apply not only to the present "bottom fisher" "turnaround artists" but to those who unfortunately bought at much higher in anticipation of growth or momentum. The same questions, motivations and diligence applied there as much as here.
Unfortunately, many who have lost capital already have move on to something else. However, there is much to be learned here. This one smallish company with its exasperating prospects and disappointing results has a lot to teach any investor especially the ones who have moved on.
I would also re-read Bramson's July letter. I interpreted this to be an optimistic but ever so carefully worded statement of future prospects.
There is a problem here. The short term and day traders would love Mr Bramson to talk up the share price into the stratosphere and then of course see it crash hopefully very soon. There would be the opportunity to make profit on both sides in a short time. Against the recent backdrop of the unfortunate KM interpretation by the investment community, I am sure that there are a lot of "revenge seekers" out
there - these are looking for revenge in the markets, in the courts and maybe even on the dueling fields.
Here, the only response for Mr Bramson is to say nothing until something has material fact. Coupled with what may be a natural retisence, I think that we are going to get very little in the way of "press releases" from the castle; especially if there are impending deals in the wings. These deals may take months to unfold and then fall through. Until they can be announced in a material way, there is nothing that should be said. This kind of silence is not appreciated by the investment community. It is really quite bad for business.
So where does this leave us? Right back to first questions. One must review the evidence at hand and then make a judgement as to future prospects. Other facts to consider are current price in relationship to historical price. Oddly the record of recent past financials is
interesting but it can be misleading. What is only necessary from the financials is that there be adequate cash flow to assure an ongoing concern and that provision for working capital and investment funds are appropriate to the targeted levels of business prospects.
Ed Perry |
