the value of tipsters

I really thought that I had seen it all. I have been trading this market for the past 30 years and rely on my investing/trading P&L to support me and my family without recourse to any other form of income. I say this to hopefully give myself some form of credibility with any person reading this post.

So saying , I have never seen a professional (and financially remunerated) tipster put out quite such a bizarre recommendation as the one that came out yesterday afternoon. There was nothing factually incorrect in what he said. Nothing at all. He reiterated what the new CEO had stated was the new revenue and expenditure target. He stated a view that gold could move up or down $100 - a point on which I strongly disagree as the commodity clearly has the ability to move far more than that $ figure.

So what can we extract from his letter? His point is that they should be generating in excess of $40Mil next year net of operating costs. Even if we take their recovery numbers from before the plant shut down to instal the new pipe work then they should still be able to produce gross revenue of $62Mil p.a.

Why oh why therefore do you turn bearish at this point in time? I am flummoxed. You can build a bearish argument for the stock just as easily as a bullish one. You can say that the new CEO is trying to run before he can walk. You can say that the only new job position that should be created is that of a professional marketing individual - A POINT ON WHICH I TOTALLY AGREE. You could also say that the market is uninformed. All of these points are true.

The bullish argument is far simpler. The process works - we know that. They are improving recoveries as the tweaking continues - we know that one as well. The new CEO is actually extremely highly regarded by people in the know. We know how much gold and silver they have in the ground. We know that they have a business and a technology that works yet we chose not to believe what is in front of us.

PGI's cash position is the envy of a large number of Juniors. They have no need to come to the market to do a cash raising thanks to what was a stunningly good deal with CAMIF. Yet we still chose not to believe what even the newsletter stated - that they are a profitable company pre debt repayments.

There seems to be a large group of people on Hot Copper who have seen too many Mel Gibson movies - namely "Conspiracy Theory"! Pros in the market aren't half as clever as people would like to believe. There are certainly people who get The Nod and will front run announcements. In my opinion they are scum and are no better than common thieves. I do not believe that there is a gang of devious manipulators who operate this stock - the P&L just isn't there for them. The share price just moves around as a result of supply and demand - pure and simple.

What we do have is a company that has been beaten up in the past for putting out too little info, then beaten up again for putting out too much info, that was too detailed and now they have clammed up and gone to ground as they can't figure out what the market wants to hear!!

If I was the new CEO I would do exactly what Casley has done. Under promise in the hope of then over delivering. Therefore our decision is now purely binary - you can either believe the management or go play with the boys and girls who buy Bank stocks for the dividend yield.

Stocks are never incorrectly priced - they just reflect the level of fear present at any given moment in time - fear of missing the rally or fear of toasting your balance sheet. I believe that PGI's share price does not reflect it's prospects going forward. But then again I am just going on facts that I analyse in an unemotional fashion rather than throwing my hands up in the air, lobbing my toys out of the pram and suggesting that something is hideously wrong just because the company's register is stale and lacks institutional support.