A rising tide floats all boats. Nowhere is this more true than in the stock market, particularly in the end stages of a big buying binge. As the market goes higher and higher, latecomers find that they've been priced out of the quality highfliers, and they typically focus on lower quality also-rans. This is how even boats with holes manage to rise if the tide is strong enough.
And so it is gold and it's poorer cousin, silver. Almost immediately after I wrote the piece on the big spike move in the yellow metal, imagine my surprise to see Ross Beaty, the CEO of Pan American Silver (PAAS) as a guest on Kudlow and Cramer this past weekend. Of course, they had to bring PAAS Director and SuperBear Bill Fleckenstein on for an "I told you so" encore.
I couldn't help but to laugh out loud before calling my friends, because the background behind Mr. Beaty was the corner of Robson and Burrard streets in downtown Vancouver, a few blocks from my old haunting ground of the Vancouver Stock Exchange, that notorious place crowned as the Scam Capital of the World by Forbes magazine in 1989.
What is little known, of course, is the fact that the subsequent cleanup by the regulators of the B.C. Securities Commission was so zealous that by the time the Bre-X fiasco came to pass in 1996, about the only exchange that *did not* have it listed for trading was the VSE. The pendulum swung so hard the other way. Listing requirements for speculative stocks became so stringent that most of the scam artists moved to Florida to do deals on the OTC Bulletin Board or "pink sheets" in the United States, where abuse and fraud run rampant.
For a few years after the big overhaul, business ground to a halt and what money that was raised was done by way of private placements with institutions and high net worth individuals. And now, what's the result of a decade of tight regulation and rising gold prices? The public, particularly U.S. persons, are basically shut out, while institutions and people who were already rich simply get richer.
Of course, I am sure they will find a way to open up the market at some point. Perhaps it will take a few years, just in time for the public to show up -- at the top.
04.01.12 12:47 #