Forum Archive Index - October 2003

["David & Jill Stevenson" <djstevo@quicksilver.net.nz>]

At risk of accusation of long-windedness et. al. from some quarters. But that is all healthy stuff - when viewed correctly. The subject of early warning indicators rattles the memory  as well  as one`s feelings of security somewhat.

    Let us reflect upon just how times have changed relative to how a fragile human psyche reacts and over-reacts to events. The sharemarket, for instance. Starting with the 1960`s minerals boom in Australia . Who followed the dizzying heights of Poseidon and Tasminex phenomena in particular? Those were good days to cut one`s teeth in the face of the unreal .Whether as an emergent winner  or loser . In those days a mineral prospecting license could be taken out one day. A week later a company prospectus issued to a gullible public sustained in an ephemeral market. All takes place on few fundamentals other than sometimes  a contrived pipe-dream.  A company flotation follows with  over -generous option issue to founding shareholders.

    On the first day of trading a nervous public mingles with founding shareholders . To one side a bikey , apparently carelessly, drops from a back pocket an official looking document. A timid investor picks it up when "nobody "is looking. It has all the hallmarks of being an official Geological Assay Report following laboratory analysis of ore samples from the prospect subject of that day`s share float - By coincidence !  In professional understatement  therein it seems we have a re-discovered King Solomon`s Mines situation. Within minutes the atmosphere is electrified from a simply expectant mood. Imagination now rules events.

     Hollywood could not match that type of reality. As they say - truth is stranger than fiction.

     They were heady, exciting and euphoric times. Motor-cycle gang members, who could not/ would not and later need not / find work spent their days on the Exchange floor . They  soon adapted to the lingo and market jargon of mining technology . They were more savvy than the conventional dealers. It was not long before they up graded their Harley Davidsons for Rolls Royces and the latest Mercedes-Benz .

     That was illustration of fortuitous events providing market indicators to astute observers in a long gone era.

      By contrast, let us examine the present and the future  in the light of the different times in which we live.Terrorism is a prime factor  now. Their impact is rather  greater , philisophically , as an impending rather than actual threat ./ Either prospect is equally devastating on a nervous investing public. The 9/11 disaster clearly was preceded by speculative buying  short on the US Exchanges . The CIA is still attempting to trace and freeze foreign bank accounts harbouring those ill-gotten returns. Let us visualise a scenario that just maybe the recent spate of International power breakdowns were connected and an experimental prelude to subsequent events.Have the appropriate security and  consumer protecting watchdogs  ability to read future indicators and implement controls against market speculators acting for those terrorist forces? There is immense potential market manipulative power in the hands of those terrorists for as long as we allow buying short in anticipation of events of which those terrorists have total control.

     We certainly live in uncertain times whether as investors or as participants in the very act of living in a dangerous world. I apologise for the digression.

 

                                  David S.