news coming ?, page-36

James,

Thanks for the insight into the world in which you live. It sounds like a magical and mysterious place. Any place where you can simply add the word "FACT" at the end of your sentances and it magically becomes so is a wonderous place indeed.

At the risk of "pontificating" further please let me give you some insight into my world. In my world we have a saying: "You can polish a turd, but its still a turd". Sadly in my world I can't simply tell everybody that the turd is a gem as we have the misfortune of having many free thinking individuals who would use their own logic, observations and experiences to evaluate statements and only a small number would just take my word for it. While I would very much like it to be your way, if I expected that I would be considered "unbelievably nieve". Interestingly you add the word "FACT" to the end of your sentances and tell me that I'm "unbelievably nieve" because I don't share your views. In my world we call this "irony".


I note that all of your "FACTS" are based on a notion of success. You say "The function of any company is to be successful, FACT". This statement infers that there is some common definition and measurement of success which every company subscribes to irrespective of their business activities and owners objectives. Would you be so kind as to share with us your formula for calculating the degree of success for each company as without said formula to compliment your statement the word "sucessful" would appear too subjective to have any meaning ?

You also state "When companies are successful the share price raises in accordance with the success, FACT". Its hard to evaluate this statement without knowing your formula for calcuating success as discussed above. Is the rise in the share price "in accordance with the success" immediate or is there a stated period of time after the "success" is achieved that the share price will be guaranteed to rise ? Also how much is the share price to rise based on various degrees of success ? One assumes that there are degrees of success or else companies would simply announce "we have been successfull and our share price will rise tomorrow by exactly 25% in compliance with JCs success model". Can you please explain how this works ?

I believe the job of managing a company in our world would be considerably easier if your next statement was really a fact. You state "Companies with high share prices have little difficulty in raising funds, very often internally, FACT". Lets work through that one shall we. If company A and company B both have $1m in assets and $5mil in annual profits but company A has only 1mil shares on issue but company b has 100mil shares on issue then company A has a share price of say $50 and company B a share price of $0.50. You think that company A can easily raise capital but company B can't despite both having the same income and asset backing. That would be a very intersting phenominon if true.

If this was in fact true I could tomorrow start up a company selling polished turds. Said company would have just $1000 in seed capital and presumably relatively low income from those very few people who were likely to believe that the product was in fact a gem because of the label which stated "GEM (FACT)". If I only issued 1 share in my new company its asset backing alone would give it a share price of $1000 per share. Not bad right. Because it has a high share price I shouldn't have any trouble raising new capital right ?

You go on to say "Your pontificating shows a serious lack of basic understanding of the basic unit of the capitalist system". After reading your entire post I feel that this secret unit of capitalism is still a mystery to me.

I'm also at a loss to reconcile your theory of direct correlation between "success" and share price with your later statements explaining the share price falling to $1.40 with this "You must understand a lot of those sales were forced sales triggered by short selling levers". Are you now indicating that something outside of your "success" measurement may in fact influence share prices or are you just saying that we don't acknowledge these because they were unfortunate ?

"You do not create wealth by ignoring the marketplace, running around at GFC garage sales and taking your mind off the ball". Actually there is nothing about this statement that I agree with. Firstly the GFC created great opportunities for those with cash to buy assets cheaply. I know I purchased a number of things at 80% reduction and have since made a nice profit on them. CDU and many other companes did the same. Not sure it was a garage sale they went too though. If you have seen all of the excavators etc you would know that they wouldn't fit in any garage. Also I think its fine to "take your mind off the ball" as long as long as your eyes are still watching it !

And finally you give me an example of how things work in your world. "If two companies want to raise 200 million and company A's share price is 20 cents and company B's share price is 10 dollars guess which one will find it easier to raise the money. Please try to understand a bit of basic logic". I am really trying to "understand a bit of basic logic" but sadly I'm struggling.

If company A has 500,000,000 shares on issue and company B has only 10,000,000 shares on issue in your example then both have exactly the same market cap, ie $100,000,000. I would think that both companies would struggle to raise the required $200mil that you stated. Even though both companies want to raise additional capital equivalent to double their current market cap you seem to think that company B will have no problem but company A will struggle. In my world both would be in exactly the same situation.

In fact in my world company A could simply do a 1:50 capital reconstruction which would result in the same $10 share price as company B. Given that a company can engineer any share price its likes by either consolidating its shares or issuing new ones I fail to see the absolute meaning of the share price as a guide to a companies ability to raise capital.

Sorry I'm not as clever as you James and I fail to "understand a bit of basic logic". Maybe you are correct that I am "unbelievably nieve" or maybe we just live in different worlds. Mine in the real world. Where is it that you live ?

Good luck to you though. I hope you do well.