SOUTH AFRICAN MINING Message Board

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Gold/Mining/Energy : SOUTH AFRICAN MINING

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To: sea_urchin who wrote (238)	9/22/1998 4:51:00 PM
From: EZbeliever	Read Replies (1) of 472

Searle Sennet....Good answer, much better tone! I really like your statement "since at the best of times one only has partial information about what is going on". That is a very powerful truth. This is why we must all feel our way in the dark and process information in ways we feel is the best possible. I doubt there are any RANGY stockholders who have not been dissapointed in the latest price and volume performance. Particularly, in light of the flurry of upward activity with DROOY. Your emphasis on relative strength no doubt contributes to your gloomy outlook for Randgold. I am of the opinion that the market is not nearly as efficient as precieved by many. I think price movements in financial markets and individual equity prices are highly influenced by emotion! A perfect example of this is the recent strength of DROOY. I have been tracking Durban regularly for 2 1/2 years so referring to a chart is not necessary. It too languished this spring and summer just like the vast majority of PM equities. All of a sudden volume started to edge up and it's price followed. Little did anyone know that it would soon be the feature company for Jim Blanchard's Gold Newsletter. The "market" didn't anticipate some great fundamental reason why DROOY is a superior company. Certain insiders knew what was soon to be delivered across the world to thousands of gulible newsletter subscribers. Presto!....The day it hits USA mailboxes DROOY gains great "strength". Emotion, plain and simple. Now consider the negative emotion of most of the world's investors regarding PM equities. PM investors are so bruised and bloodied they call the past few weeks a rally. Hardly. The relative strength of this "rally" is pathetic. Not just Rangy but most mining companies. Anyone can point to a few examples of superior performance but those are few and far between. I own and follow a nice cross section of companies and nobody can tell me we have had a run up. This is the benefit of accumulating during these times. When one starts seeing gold promotions on the cover of Money Magazine it will be far too late! "Buy when there is blood running in the streets". When it comes to junior companies there is not much left to bleed. Speaking of juniors, allow me to contrast RANGY to AU. Comparing these two is like comparing an elephant to a mouse. Anglogold is THE senior mining company. Who could argue that it is not a proxy to the price of gold and overall mining industry. However, the amount of leverage in the ownership of AU is minimal. I buy PM equities for the potential for explosive appreciation. Today AU is at 21 5/8 and Rangy is at 9/16. Fifty two week high AU= 24.37, RANGY = 3.87. If each moves to it's yearly high what will be the ROR to the current investor? I am willing to accept the risk of a total loss in return for 10 to 1 appreciation potential. Especially considering the fundamentals of RANGY. Sometime in the future the POG and investor sentiment will change. When it does, companies like Randgold & Exploration will take off like a rocket! I plan on being along for the ride.

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