Eli74;
I am certainly, no gold bug. I never was. However, when someone shows me a correlation between two markets that seems close, over a long period of time, I will least, listen. I never knew of this correlation until yesterday and when I consider the source I will, at least, take note. About the importance of gold. I tend to agree with you. It is no longer considered real currency except, to people who work it, like jewelers. Silver is far more plentiful and is an industrial metal with real value. I've always thought that if any metal is to be used as a standard of relative measurement, it should be silver. Time will tell if Bollinger was correct. It would be interesting if it plays out the way his charts show. However, my real concern is about future interest rates and what it might do for VLNC's financing prospects. Even is everything goes along perfectly for VLNC in the future, the company will have to finance itself for several years to come. In fact, the more successful it is in expanding it's business, the more financing it will need. Internet and software companies aside, it takes a long time to build capital in capital intensive businesses. Manufacturing is almost always capital intensive. That is why the market usually keeps the PEs down in manufacturing companies as opposed to service companies. Consider that before you speculate about the stock zooming to the moon. I doubt that VLNC can go from an entrepreneurial startup to a large manufacturing company without dilution of its stock. The two are not the same animal. I guess, I am trying to temper expectations with a dose of reality based on experience. I have had to make payrolls every week and obtain lines of credit for use as working capital. VLNC's financing needs will probably exceed its profits for several years to come even, in the best scenario. In that respect, the entrepreneurial founders are well suited to manage this phase of the company's development. They know what to expect.
PHOTOMAN |
