 Goldbugs, Goldbugs!
Wherefore art thou, Goldbugs?
.
Ralph Kettell
Archives
June 8, 2004
I had planned on finishing
this report last Friday after the gold show, but that was apparently
not in the cards. I was concerned I might be scooped by another
writer on this story, but apparently no one else saw what I did.
The big news from the gold
show is that it was big, very big, much bigger than usual, nearly
twice as big as last year's show. Instead of one floor of exhibitors
and small conference sessions with miscellaneous events on another
floor, this year there were a load of companies showing off their
wares on two full floors. Many, many, many companies, in fact
so many companies that I had never heard of many, many of them.
According to the conference
directory, there were 239 companies represented at the show.
Two hundred and thirty-nine! Wow! This sector is hot, maybe too
hot. Oh no, that was perhaps true back in March (you know when
the companies were registering to exhibit), but certainly not
now. No, not after the correction, er crash of the past month
or so! Enough frivolity, I will give some more details concerning
the show.
I arrived at the show around
10:00 AM on Tuesday. I was worried about arriving at that time,
because I had misplaced my registration packet and that meant
standing in line. I remembered from the NY show last September
that the lines, aka horde, were queued back to the elevator at
a similar time in the morning. Imagine my pleasant surprise when
I got off the elevator on the fifth floor of the Marriot Marquis
and there were only three people in front of me at the registration
booth.
I didn't think too much of
the small crowd at the time and entered the 5th floor exhibit
hall. As I walked through the exhibit hall, I thought the crowd
looked a little light, but attributed it to the more spread out
nature of the show with it being on two floors this year. The
more I strolled around and talked to people the more I realized
that not only was the show not crowded, but also it was chock
full of industry folks and not very full of potential investors.
Where were the investors, you know the genus "goldius bugius."
The gold bugs were few and far between!
My best metric on how not crowded
the New York Gold Show 2004 was or was not (depending on your
point of view) relates to Novagold. Novagold is a fabulous
junior exploration company with incredible resources and great
prospects for adding more in the near future. As such, they are
always an incredible draw for both current investors and those
trying to decide if they want to become investors in the company.
For numerous reasons, I and some of my associates usually need
to talk with either the CEO or one of Novagold's VPs. We normally
end up waiting for several minutes only to find that they have
a meeting to get to and we set up a later time for an appointment.
This past week, I had to wait only 3-4 minutes to talk to their
VP and he and I conversed for a good 10 minutes or more. During
that time, no other investors came up to chat, in fact no one
even stopped to stare at their resource charts and maps while
we were talking. No one stopped to pick up any literature in
that time! Incredible! I have never seen anything like it! This
was not some no name, Johnny come lately, junior exploration
company. This is the premier junior gold company which will be
a mid-tier producer in three years time. [NovaGold]
The more I walked around the
exhibit floor and ventured up to the 6th floor to see who was
upstairs, the more I was aware of the lack of investor presence.
The talks which I check up on were not at all well attended either
when compared to previous years or other recent conferences.
On Thursday, the attendance
was worse still. Exhibitors could be seen wandering around talking
with each other and checking out each other's projects and progress.
Amazingly some companies would leave their booths unattended
when they had meetings or went to lunch. I heard a rumor, that
the conference organizers were recruiting folks to come to the
free show for the food and door prizes. Please remember I said
this was only a rumor. I do know that there were a lot of folks
running around with "treasure hunt" cards to get all
sixteen stamps so they could be entered into the drawing for
the 100 silver coins and the diamond tennis bracelet. Many of
these "investors" had little or no interest in getting
information from the lucky (unlucky?) companies who had the stamps
at their booths.
Now what conclusion does this
lead to?. Is the gold bull dead and is this just confirmation
of that fact? Not likely. As a dyed-in-the-wool contrarian, I
will spell out precisely what it means. "Everyone"
knows the gold bull is dead, just look at a chart of the HUI.
There is little or no interest in the sector at this time. What
does this mean? Simply it means that all the gold bugs have sold
out and are waiting for the bear market in gold to run its course.
They have been so conditioned by '87-'88, '91-92, and '96-97,
that this is just another aborted bull run within a long term
secular bear market in gold. As Richard Russell is fond of quoting
in relation to stock brokers not making any money, because they
don't believe their own BS, so too are gold bugs currently guilty
of not believing their own BS at a time in history when they
should be so convinced of the validity of their cause.
Folks, "THE BOTTOM IS
IN!" The lack of interest at the show in NY just underscores
the extremely low bullish consensus numbers toward gold and gold
shares which have been registered the past few weeks. If I were
an investment advisor, which I am not, I would be telling all
my clients to buy gold shares with both fists. Of course I have
been suggesting to all my friends and family to do so. In order
to buy low and sell high, you have to buy low first, unless of
course you have a penchant for selling short and now would not
be the time to do so in gold shares.
June 7, 2004
Ralph W Kettell, II
Archives
email
P.S. I would like to apologize
to a couple of folks at the NY show who wanted to talk to me
about one or more of my past articles/analyses. I was very busy
with meetings and had to continually put them off. Please feel
free to email me, and I will gladly give you a call to discuss
your questions.
Disclosure:
 The author is not an investment advisor
and this article should not be construed as a recommendation
to invest in the discussed securities. The author is merely presenting
some possible scenarios and what the potential risks and rewards
associated with an investment in these securities could be. The
author has not been paid to write this article, either in cash
or securities. The author does have
a substantial position in this stock, but has not bought or sold
in the past 30 days and as all of his stock is from a private
placement and has a legend, none will be sold for the next 60
days or more.
Disclaimer:
The
author's objective in writing this article is to make potential
investors aware of the possible rewards of investing in this
stock and/or warrants and to elicit interest on their part in
this stock to the point where they are encouraged to conduct
their own further diligent research. Neither the information,
nor the opinions expressed should be construed as a solicitation
to buy or sell this stock. Investors are recommended to obtain
the advice of a qualified investment advisor before entering
into any transactions in the stock.
_______________
321gold
Inc ref: 05666
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