From Raging Bull:
Forum members,
I have put together a four part informational piece that I believe goes the distance in explaining the KRY debacle.
caracas3
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Written by Peter Grandich in his last investor letter before accepting employment in the Bahamas:
Reflections On The Investment World
I could write a book on the behind-the-scenes of the investment
world and it would be a shocker to many. I always said that if
"60 Minutes" ever did a hidden camera investigation, the stock
market would crash. For several years, I have given a speech
entitled, "Everything You Always Wanted To Know About Investing,
But Wall Street Will Never Tell You". Let's just say that when I
was done, all my Christmas party invitations to brokerage
parties were certainly ripped up.
I am sorry to say that over the years, things have gotten worst,
not better. Not only is there still very little effort on
education versus sharpening selling skills for the typical
advisor, but many individual investors now think they can do
it all by themselves ( and in some aspects they were smart to at
least try as I have always stated that only about 10%-30% of all
financial advisors can truly appreciate the financial risks
associated with investing, but of that percentage, only a small
percentage can appreciate the mental anguish their advice can
cause).
Just turn on the TV now and you will see ads for some individual
investor being portrayed as being ripped off or poorly serviced
by some advisor and simply by going online and doing it
themselves, individual investors are suddenly sitting on their
own yacht or looking out from their beach house. The implied
message is if you do it yourself, these riches await you. Look,
a lot has been made about how many investors now do it
themselves. What is not discussed is that for decades,
individuals became full-time traders (brokerage firms have had
proprietary trading desks manned by very smart people with great
talents that lost a lot of money) and despite being a part of the
action all the time, only a small percentage ever ended up with
that yacht or house. Yet, now, some would want you to think that
you can maintain your regular job ( or leave it to become a
full-time trader) and by becoming part of their discount
brokerage or family of funds, it's all as easy as 1,2,3.
Deep down, I know in my heart that the only 1,2,3 for most will
end up being the referee standing over them counting them out.
Life has never been fair to let the great masses live happily
ever after and despite the belief this is a new era, I am
willing to bet that it is indeed, "not" different this time as
well.
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shortee wrote the following essay to members of the forum investment community:
I am makin' notes for a book and I just thought of something that I would describe as the best tip that I have ever divulged on a forum. It's not some “buy this” hype, rather a key bit of information surrounding this whole Latin American gig, and is especially appropo for Venezuela. Don't think of the information as being pertinent to today's price of KRY, rather to the big picture, the big picture that has eluded the BoD of Crystallex and all of their cult-like followers.
Have ya ever heard of the “Latin Mafia”? No? You say “No”! I do not mean the narcotics scalpers and the heater technicians! I mean the famed “Latin Mafia” of Wall St. You say that you don't believe me? Call a big investment house like Salomon Bros, Morgan Stanley, Merrill or any of the others and ask to speak to the chief IEG (International Emerging Growth) bond trader. You probably won't get through, but ask his name. It will be something like Lizzardo Paris (a made up name, not meant to resemble any gecko livin' or dead!). These are the dudes who trade the Brady bonds and other Latin American government bonds at the world's biggest investment banks. International Emerging Growth markets before Brady was a euphemism for “backward third world country markets”. Well our government decided to relieve their plight. Uncle Sam has plunked down enough Brady bonds to bail out Mexico, Brazil, Peru and an ever lengthening soup line of economic basket cases. The Brady bond's principal is guaranteed by the US government by pledging zero-coupon bonds to the bailout. The interest is not guaranteed so the Brady bonds carry some hefty premiums! The lendee (economic basket case) pitches in enough collateral to cover one or two interest payments in the form of sewer bonds or some other farcical entity. Who pays if the economic basket case misses more than two interest payments? We do hombres, with the full backing of the US government (taxpayers) in the form of still more Brady bonds to bail out the ones already defaulted. The principal on the zero coupon bonds used as collateral doesn't come due for thirty years, long after the slick bankers have retired. It is one of the best scams ever to emit from a banker's spongy cortex.
Back to the story . . . . . The traders who traded these bonds in the 80's became filthy rich (and so did their employers) by pullin' down $1,000,000 to $10,000,000 bonuses (that's US dollars!) - - and I'm talkin' every year! Where did these guys all go after the roaring eighties? Nowhere! Those who haven't returned to Latin America as fabulously wealthy millionaires are still in the big trading rooms pickin' your pocket, and many have moved to the IEG markets trading floors as head equity traders. These caballeros, a couple of whom are Venezuelan, are all Latin - - Puerto Rican, Cuban, Argentine, Uruguaysian, Chilean, etc.
You ask what this has to do with “junior” mining stocks in Venezuela or other Latin countries. Folks, these guys know the sources and have the connections (political, social, financial, personal, criminal, religious) to know the score from the git go! They are pros! They have bulging offshore bank accounts in the Caymans or Aruba. You, I, or no one else on this planet can beat them. So I say join ‘em! -- or at least follow their lead and don't get crosswise with them! This advice goes for the BoD as well as the small shareholders. Crystallex commited not one, but two mortal sins when they put together their BoD. Ask “Lizzardo”! He may be havin' a slow day and feelin' a little guilty . . . . . nah, no way gringo!
Actually, KRY is peanuts in today's international equity markets, and the traders wouldn't normally be interested, but what in the hell do you think Ascensio hatched from, dinosaur eggs? And how about the SCJ decision that every big trader knew about in advance? Where were the forum members? Oh yea, they were quarreling over the ultimate share price, the millions of ounces of gold and treasure buried at Las Cristinas and the proper resort at which to hold the marvelous “Winner's Circle Party”. Most of the small shareholders were never in the ball game (they didn't even have tickets)! When you hear supposedly mentally balanced investors sayin' things like “OUR BoD” and “OUR company” and “OUR gold”, do ‘em a great favor and hit ‘em up the side of the head with a chunk of #8 rebar!
Hash this over for a little while. Then cover your blistered rumps and hope that they never strike again! . . . . Better yet, diversify away from KRY and away from the stumble bums who thought the scam up while fishing on a yacht while driftin'in the Gulf Stream! . . . . . .
shortee:O)
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rober3n wrote:
“If you want to know what will be happening with KRY's stock price, don't ask the BoD or PR people; ask the leaf raker at the SCJ building in Caracas.”
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shortee wrote:
“Living well is the best revenge.” |
