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Gold Resource Corp Message Board

  • engynear engynear Feb 18, 2013 5:10 PM Flag

    This Day in GORO History---2/18/2012

    FDAHope starts it off with a level-headed statement about following Institutional Investors:
    "The lists of institutions buying gems like Countrywide and Lehman when it was clear they were never going to survive was very long. Not to say that GORO is in that position, but to see positives just because institutions take a position is a bit short sighted. "

    "Sambrichsanzo" puts Engynear on the hot seat for being so negative. Sam seems to come from a logic that the more negatives someone has about a topic, the less likely he will be proven correct about that topic. That is, a logic that says, if one can't even think of one positive point about a company, then this person's negative points should all be discarded. Sam asks Engynear:
    "Well Engy, You have taken so many pot shots at this company that I have lost count.....Remember that I used to have a long list of your negative findings. Perhaps, if you could boil it all down to YOUR big 3 problems with GRC...a smoking gun, if you will. "

    And Engynear spells out that he has a problem with a management that hypes and lies like GORO's; that cash costs are higher than quoted, and that if truly the resource were as rich as management has repeatedly stated they would be spending money on aggressive resource. Here's Engynear's comment:
    "I'll give you an example: Management has been regaling prospective investors at investment conferences with tales of "Low Cash Costs" and "High Grade Properties".....But management also has pushed very hard, and posters to this board have repeated the mantra of how rich these properties are. Yet, for every dollar of revenue, how much do they spend to get at these rich deposits?
    75 cents? 50 cents? 25 cents? Somewhere in between?
    No, they are spending a whopping 4.5 cents for every dollar in sales to explore these riches."
    (ed. note: the exploration expenditures were lower than the sum total of the Reids' compensation)

    Engynear then asks a question for Sambrichsanzo to ponder:
    "And when this reality of expenditure is coupled with the history of management hyping what the future will bring, is it any wonder that a logical person would conclude that even management does not believe the tales they are telling you about rich deposits?"

    Ulf redirects the discussion back to the Institutional buying issue, with a naive, oft-repeated belief of retail investors:
    "And yet, institutions have increased their positions and more want to. Why would they do that? You are indirectly saying that persons running thes institutions are in fact not logical persons? Those who have had their own people on the property and ade their own evaluations?"

    (ed note to Ulf: How did more institutional investors "WANT" to increase their positions, but not actually do it? Why did they not just simply increase their positions?)

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