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Gold/Mining/Energy : Tri-Vision & The V-Chip -- Ignore unavailable to you. Want to Upgrade?

To: Graham Dellaire who wrote (3260)	7/5/1998 12:58:00 PM
From: John Sladek	Read Replies (2) \| Respond to of 5743

Greham, >>>Analysts can't make predictions (and either can TVL really) until the first shipments are actually sent and PO numbers are accepted. I am usually pretty cautious about analysts estimates - I do not consider these predictions to be independent of the company's management, and in many cases question their reliability. Here's why: 1) Unless the company is really large, and has a long track record, it is pretty difficult for an analyst to do an analysis without relying almost exclusively on information provided by the company. With small companies with short track records, there is not very much independent information available, and the analyst is more reliant on information provided by the company. Sometimes the information provided by the companies is unreliable - even if they have audited financial statements (Phillips, Sunbeam and YMB Magnex are some recent examples), or proves to be optomistic for unforseen reasons (i.e., change in market, inability of management to respond effectively to challenges). If Bre-X has told us one thing, its that some analsts who should know better (after all given the number and importance of gold stocks on the TSE shouldn't Canadian gold analysts be among the best?) are prepared to parrot the management's line - after all, its easier than doing real work. 2) Because there are few Canadian consumer-oriented high-tech companies, there are also few analysts (if any) in Canada who are compitent to do a credible analysis in the first place. 3) I once lost some money (ok 80% of my investment) in Advanced Gravis (a Canadian manufacturer of consumer electronics - namely joysticks, sound cards and game pads), largely as a result of falling for bad analysis. The company had some good technology and decent sales, but the analysts reports (as well as public statements by the companies management) clouded my vision, and prevented me from realizing that this company was poorly managed and wasn't particularly interested in the common shareholders (i.e., repricing stock options, insider selling, large salaries for poor performance and dilution through issuing stock options). By focusing on technology and the future, the analysis prevented me from seeing the present problems. They also failed to assess the likelyhood that management would actually meet their fanciful targets. This is not intended as a bash against TVL - just some food for thought. Regards, John Sladek