nothing but talk, page-8

Spruiking goes on despite a harsher reality

PURE SPECULATION: Robin Bromby
From: The Australian
May 30, 2011 12:00AM

ILLUSIONS, delusions, confusions or, in other words, the frustrations of investing in the junior mining sector.

Trawl through all the hype and plans of 10 and 15 years ago and ask yourself how many of these schemes became working mines. And remember this when you hear about the latest "exciting" project.

Why this soul-searching? Because there is a feeling abroad that the state of the markets is not all that robust, and yet the spruiking is going on unabated.

We've got the PR types and their media connections working to get the punters into stocks of the PR's clients. At the analyst level, we are seeing the growth of what we call "vanity reports", the seemingly independent analyst's reports from a seemingly independent analyst, but which have been financed entirely by the mining company subject of the report.

The PR firm keeps charging the client several hundred dollars an hour and the hired analyst walks away with a comforting five-figure sum. Then there are the companies themselves doing discounted placements, the recipients of the new shares then flicking them for a quick profit, and the mug punter left watching the share price fall back to near the placement level.


Ring a bell? Still seeing nothing done here!